Cornell University Library JK 791.A5 1922d increase of annuities under retirernent 1 3 1924 002 434 441 JK U. S. Congress. House. Committee on Reform in 791 the Civil Service. A5 Increase of annuities under retirement law. 1922d THE LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY INCREASE OF ANNUITIES UNDER RETIREMENT LAW HEARINGS BEFORE THE COMMITTEE ON REFORM IN THE CIVIL SERVICE / HOUSE OF EEPEESENTATIVES SIXTY-SEVENTH . CONGRESS SECOND SESSION 11 FEBRUARY 16 and 21, 1922 WASHINGTON GOVERNMENT PRINTING OFFICE 97037 1922 COMMITTEE ON JIEFORM IN THE CIVIL SERVICE. House of Representatives. Sixty-Seventh Congeess. Frederick: R. LEHLBACH, New Jersey, Chmrman. LOUIS W. FAIRFIELD, Indiana. EUGENE BLACK, Texas. ADDISON T. SMITH, Idaho. HOMER L. LYON, North Carolina. MARTIN C. ANSORGE, New York. LAMAE JEFFEES, Alabama. FRANK H. FUNK, Illinois. MEYER LONDON, New York. JOSEPH H. HIMES, Ohio. I. CLINTON KLINE, Pennsylvania. B. CARROLL REECE, Tennessee. GEORGE P. CODD, Michigan. Mae R. Bkown, CUrk. II . -' i ,11'- INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Committee on Reform in the Civil Service, House op Representatives, Thursday, February 16, Wn. The committee met at 10 o'clock a. m., Hon. Frederick R. Lehibach (chairman) presiding. The Chairman. The committee will be in order. This hearing was called for the purpose of discussing various bills that have been introduced to amend the provisions of the retirement law, either by increasing the annuities provided in the existing law or by providing an earlier retirement age, or by providing for retirement at the conclusion of a stated period regardless of age. All these various suggestions with regard to the retirement law are either in separate bills that have been introduced or some of the features combined in single bills covering the subject. The committee will hear first the Members of the House who desire to be heard, who have themselves introduced bills on the subject. Mr. Fairfield, a member of this committee, has sponsored H. R. ]0246, and if he desires at this time to be heard the committee will first give him its attention. STATEMENT OF HON. LOUIS W. FArRFIELD, A BEPBESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA. Mr. Faiufield. Mr. Chairman and gentlemen of the committee, the retirement law has now been in operation something over eighteen months. It was essentially new legislation in a field in which the General Government had never engaged. It is not, strange that under circumstances of that kind a bill, though carefully adopted, and I think wisely amended as it was under consideration, should yet prove to nave in it some defects. Perhaps we have had enough experience with the operation of the bill to consider definitely some of the changes that ought to be made in the legis- lation. I might frankly qay that personally I have always been a believer in the principle of a retirement law. It is generally recognized by the great commercial organizations of the country that it is not proper to use a man through all of the best years of his life and then permit him to sink into a condition where he does not have at least the necessities of an old age that will be fairly comfortable. However, I think it is the opinion of most of the Members of Congress that in no sense should the Government become so paternalistic that it will undertake to care for its employees without proper forethought on their part through the years when they are able to earn for the old age that is, sure to come and for the days when inefficiency and physical weakness make it impossible for them to pursue the ordinary vocations of life. So that in the con- sideration of this bill, which undertakes to make some changes in the present retire- ment law, it is well always to bear in mind the temper of the public, the temper of Congress, the basic principles of righteousness in its consideration; the contribution that ought to be made by the self-help of the employee and the obligation of the Government to its faithful workers. I took the trouble to find out the status of the present retirement law so far as assets are concerned, after the brief period during which it has been in operation. From the Pension Office I had the following report as to the amount paid out of the annuity fund up to the end of the fiscal year June 30, 1920. It amounts to $2,913,547.34; paid out up to the end of January 31, 1922, $3,288,637.57; total paid in annuities, $6,202,174.91. ... According to the provisions of the law now in operation an investment has been made in United States securities of $16,000,000. This, I understand, was probably in excess of the estimate made by the actuaries at the time of from two million to four million dollars. Am I right about that? I think I estimated about fourteen million. It is in excess of their estimate to the amount of about $2,000,000, which is, of course, very gratifying. PROPERTY OF LIBRARY i / NEW YORK STATE SCH§t INBDSTRiAL AND LABOR RELATIONS INCREASE OF ANNUITIES UNDER RETIREMENT LAW. In addition to that, there is cash on hand to meet the obligations maturing up to the 30th of June of this year, $3,000,000. I will say that these figures of the assets including investment of cash on hand were given to me directly from the Treasury Department. The present bill undertakes to accomplish, first, an increase in the annuity. And permit me to say that there is an error here in punctuation, line 6, page 1 of the bill, where a comma is inserted after the figures $12. Of course that is very appa- rent for, if the $12 was not uicluded in the 1 per cent of the average salary of the last 10 years the annuities would be reduced instead of increased. That was an error in the drawing of the bill and will be corrected,, of course, if any action shoiild be taken by the committee. So that the bill intends to fix the annuities at the rate of $12 and 1 per cent of the average salary for the last 10 years of service, this same to be multiplied by the number of years of service. Section 2 reduces the retirement age optionally to 60 years. In many of the munici- palities of this country 60 years is fixed as the retirement age. While there are a great many men, of course, who are vigorous at 60 and beyond, it is yet true that not infrequently a man who has devoted 30 or 40 years io clerical work finds that there is a very definite lessening of his vigor, and while he mav stimu- late himself to go on for another 10 years he does it under pressure, and when the three score years and ten, which is the Biblical limit for age. has been reached, he finds that in a very short time he drops out. In other words, for many men to compel them to continue the routine-of their work up until they are 70 years of age means that at that happy period of old age when a man can contemplate a life's work well done and can have a little bit of recreation and friendly conversation with the mem- bers of his family and neighbors and friends, he finds that he has practically worked himself to death. There are exceptions. I know men who can go right on even at 70 or 75, but I am talking about the average. The men who are able to continue beyond the age of 60 would have no particular inducement to retire and would not retire if they were able to give eflScient service. It would only be the man who feels the weakening of his ^dgbr and who really knows he must retire if he is to have a little period of rest before he goes into the great beyond who will avail himself of this provision. Section 3; I think, would require most careful analysis and I am not sure that the 3 per cent for each year under 60 is the proper amount. I would say to the members of the committee that no doubt that section will require a most thorough and careful investigation before one could know definitely as to the effect it might have in a financial way. . ' Mr. Smith. What is the number of the bill you have in your hand? The Chairman. Ten thousand two hundred an,d forty-six. Mr. Fairfield. Now, section 4 undertakes to provide for the man who, through no delinquency on his part as an employee, having served the United States at least 15 years, shall be granted an annuity certificate by the Commissioner of Pensions which shall entitle said employee when reaching the age of 60 years to an annuity as provided in section 2, provided the contributions made by the employee prior to separation remain with the Government until absorbed in annuities or returned to the employee's beneficiary. Of course, we are all familiar with the vast number of employees who have been suddenly dropped from the rolls of the Government. I think something like 70,000 have been dropped within the last year, and there are vast numbers that are being let out in the Navy Department. It does look that after a man had thus served and made his contribution there should be some provision made by which, if he cared to permit his contribation to remain in the hands of the Government until he has reached the age of 60, he shall not be deprived of the privileges that the bill is intended to convey. To be frank with yOu gentlemen, I am not a stickler for every provision of the bill. I think it outlines very definitely some corrective features that should be' made in the present retirement law. As to the basis upon which this will be made I suppose that will be discussed in executive session of the committee, but my thought is this, that while it is true that the average man perhaps should look out for old age, should be thoughtful from boyhood until he feels the shadows creeping upon him, as a matter of fact he is not. If in a great corporation, it the Government itself makes an induce- ment and permits a man to continue yielding the service through the years, I think it is perfectly proper that the Government should make some provision for that form of insurance for the old man — and I look upon this retirement law simply as along the Une of governmental insurance for old age. As to what part of that should be con- tributed by the employee, how far economically the Government ought to enter into INCEEASE OF ANNUITIES UNDER RETIREMENT LAW. that is, of course, a matter for Congress to determine. But that it is wise to put the employee into such a position through his own self-help in contributing a limited contribution which the Government makes so that his old age may be so safeguarded, in my judgment is an obligation which rests upon us as Members of Congress. Now, I have some data here in regard to the cost under the present plan and the proposed plan and the amount of the annuity. I am very sorry indeed that I was not enabled to get enough copies of this to put them in the hands of the committee. However, these will be provided, and at a future session the committee will be given the data by which they can determine what the cost is. The Chairman. They will be printed in the record of the hearings and thus be available. Mr. Fairfield. That is true. I can put them into the record of the hearings. I want to give you some idea of it. If the average salary for the last 10 years is $600 to one having served 15 years, the existing law grants $180 minimum. The proposed law grants the maximum of $270. Twenty years, minimum $216 under existing law, $360 under the proposed law. Twenty-five years, minimum of $288 under the existing law, $450 under the proposed law. Thirty years, $360 under the existing law, $540 minimum under the proposed law. Forty years, $360 under the existing law, $600 under the proposed law. Forty-five years, $360 under the existing law, $600 under the proposed law minimum. I will ask that these figures be put into the record. Now, under the existing law the percentage of pay roll as figured out by the Gov- ernment actuaries for the railway postal clerks, if they retire at 62 and they pay their proper proportion, would be 5.07 per cent. Mechanics, letter carriers, etc., their proportional percentage would be 4.02. Other employees retiring nt 70, 2.96. The total to be paid would be 3.56 per cent of the salaries. Under the present law payable by employees, 2.5 per cent; payable by Government, 1.06 per cent. The Chairman. That is after all the annuities have been taken care of for which no contributions by employees have been made? In other words, after 40 or 50 years that would be the percentage, but not the present percentage of normal cost? Mr. Fairfield. That is the actuarial normal cost. The Chairman. Yes. Mr. Fairfield. Now, under the proposed plan the railway postal clerks, 6.11 per cent; mechanics, letter carriers, etc., 5.01 per cent; olher employees, 3.59 per cent; total, 4.37 per cent, of which, if the employees paid what they are paying now, they would pay 2.50 per cent, the same as now; payable by the Government, 1.87 per cent, an increase of 0.81 per cent on the part of the Government. The actuary has appended a note here. These were figured out, I understand, with no maximum to be paid, figuring that sometimes maybe the incomes would run up as high as $2,000 or $3,000. By fixing a maximum retirement fee of $1,200 these per- centages will be much reduced, according to the statement of the actuary, and he has a definite statement with regard to it. These I would ask to be made a part of the proceedings. Comparison of benefits at |/2 plus 1 per cent of salary by years of service as compared vith present law — maximum retirement pay fl.tOO, hut none greater than averaqe for last 10 years. Number of years of service at retirement. Average salary for last 10 years. 15 years. 20 years. 25 years. 30 years. Existing law. Pro- posed. Existing law. 'Proi posed. Existing law. Pro- posed. Existing law. Pro- posed. J600 $180.00 216.00 270.00 300.00 360.00 360.00 360.00 360.00 360 00 360.00 360.00 $270.00 288.00 315.00 330.00 360.00 405.00 450.00 480.00 540.00 630.00 780.00 $216.00 259.00 324.00 360.00 432.00 432.00 432.00 432.00 432.00 432.00 432.00 $360.00 384.00 , 420.00 , 440.00 480.00 / 540.00 , 600.00 640.00 720.00 840.00 1,040.00 $288.00 346.60 432.00 480.00 576.00 576.00 576. 00 576.00 576. CO 576.00 576.00 $450.00 480.00 525.00 550.00 600.00 675.00 750.00 800.00 900.00 1,050.00 1,200.,00 $360.00 432.00 540.00 600.00 720.00 720.00 . 720.00 , "720.00 720.00 7 20.00 , 720.00 $540. op $720 576.00 $900 630.00 11 000 ■660.00 $l'200 720.00 $1500 810.90 $1 800 900.00 $2,000 .960.00 $2 400 1,080.00 $3000 1,200.00 $4 000 1,200.00 IKCEEASE or ANNUITIES UNDER EETIEEMENT LAW. Comparison of benefits atfl$ plus 1 per cent of salary by years of service as compared with present law — maximum retirement pay fl,WO, but none greater than average for last 10 years— Continued. Number of years of service at retirement. Average salary for last 10 years. 35 years. 40 years. 45 years. Existing law. Pro- posed. Existing law. Pro- posed. Existing law. Pro- posed. J600 $360.00 432.00 540.00 600. 00 720.00 720.00 720. 00 720.00 720. 00 720. 00 720.00 $600.00 672.00 735.00 770. 00 840.00 945.00 1.050.00 1, 120. 00 1,200.00 1,200.00 1,200.00 $360.00 432.00 540. CO 600,00 720.00 720. 00 720.00 720.00 720.00 720.00 720. 00 $600.00 720.00 840,00 880. 00 980.00 1,080.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 $360.00 432.00 540.00 600.00 720.00 720.00 720.00 720.00 720. 00 720.00 720.00 S600.00 $720 i 720. 00 $900 900.00 $1,000 990.00 $1,200 1,080.00 $1,500 1,200.00 $1,800 : 1,200.00 $2,000 1,200.00 $2,400 1,200.00 $3.000 1,200.00 $4.000 1,200.00 Normal cost of benefits under present law and under the proposed plan (^12 pliis 1 per cent of average salary for last 10 years) by years of service, without f 1,^00 maximum limit. Group. Existing law (per- centage of pay roll). Proposed plan.i Railway postal clerks Mechanics, letter carriers, etc Other employees Total Payable by employees Payable by Goverimient 5.07 4.02 2.96 Per cent. 6.11 5.01 3.59 3.56 2.50 1.06 4.37 2.50 1.87 1 By axing the mammum retirement, say, at $1,200, theseperoentages will be much reduced. For exam- ple, this plan cuts the annual retirement pay of certain classes as follows: $4,000 mian with 30 years' service, $360; with 40 years' service, $8S0; with 45 years' service, $1,140. $3,000 man with 35 years' service, $270; with 40 years' service, $480; with 45 years' service, $690. $2,400 man with 35 years' service, $60; 40 years' service, $240; 45 vears' service, $420. $1,800 man with 33 years' service, $150. Comparison of normal cost to Government under plan permitting retirement after SO ' years of service, with existing law. Group. Railway mail clerks Mechanics, letter carriers, and other poatal clerks. . . ; Other employees Total Payable by employees Payable by Government Cost o( existing law (per- contage of pay roU). 5,07 4.02 2.96 3.m 2,50 l.Oli Cost of proposed plan (percent- age of payroll). 7.44 7.44 6.60 7.00 5. 94 l.OG Percentage of salary to bo paid, so ai not to increase the payment of the Government. Present law. Em- ployee. 2,50 2,50 Govern- ment. l.,52 .49 2.50 2.50 1.06 1.06 Proposed plan. Em- ployee. Govern- ment. 5.92 I 6.U : 1.52 .46 5.94 i 5.94 1.00 This means that in order for the payments by the Government not to be increased, in case of voluntary retn'oment after 30 years' service, the payment on the part of employees must be iucrea.sed from 2i net cent to about 6 per cent of their salary. INCREASE OF ANNUITIES UNDEB RETIREMENT LAW. 5 Treasury Department, Washington, MarchM, 19t2. Hon. Louis W. Fairfield, House of Representatives, Washington, D. C. * My Dear Mr. Fairfield: In reply to your letter of the 18th instant, relative to H. R. 10246, the Fairfield bill, I have prepared the following estimates, based upon the recent report of the board of aqtuaries. These figures are not actuarially exact, but are a fair approximation, and, in the absence of exact data, are as likely to be as exact as is now possible to compute. Respectfully, Jos. S. McCoy, Government Actuary. Approximate normal cost in percentage of pay roll under section $ of H. R. 10246. Under plans of annuities. Existing. H. R. 10246. Eetiring at 60 years: Miscellaneous employees 5.30 5.80 6.00 6 41 Mechanics, letter carriers, etc . 6 91 Railway postal clerks 7 10 Total 6. 55 6 66 Eetiring at 61 years: 4.87 5.33 5.50 5.90 Mechanics, letter carriers, etc 6.40 6. 58 Total . 5.10 6 15 Eetirement at 62 years: 4.52 4.92 5.07 5.48 Mechanics, letter carriers; etc 5.95 Eailway postal clerks 6. 11 Total 4.72 5.72 Sections: Section 3 of the bill provides for voluntary retirement of employees who have not reached the age of 60 years. This privilege without limitation seems open to grave abuse. It possibly would be advisable to combine this section with section 4, something as follows: "Sec. 4. That (a) in case of a reduction of the force, or of involuntary separation from the Government service through no delinquency on his part, an employee, who has served the United States at least a total of 15 years, or (b^ an employee who has not reached the age of 60 years, having served the United States a total of 15 years or more, and who desires to "be retired; in either case shall be granted an annuity cer- tificate," etc. Section 4: The cost of retirement under the provisions of this section depends upon the age at which separation occurs. After 15 years' service with retirement a,t 60, the inaximum cost, under the provisions of the present law, and under the plan proposed in section 2, in percentage of salary will be about as follows: Proposed plan. Miscellaneous employees Mechanics, letter carriers, etc Eailway postal clerks 11.98 13.89 14.24 6 INCBEASE^OF ANNUITIES UNDER RETI-EEMENT LAW. With 30 years' service, and retirement at 60, these figures will be about as follows: Present law. Proppsed plan. 5.88 6.87 7.36 6.59 7.7a Railway postal clerks . ' 8.27 These estimates include both voluntary and involuntary retirements under the provisions of section 4 of this bill. Estimated cost with certain maximum annuities — Normal cost, in percentage of salary, of retirement with no reduction in the minimum annuities. Group. Maximum. $1,200 $1,100 $1,000 $800 $720 3.69 5.01 6.11 3.48 4.81 5.91 3.35 4.60 5.70 3. 10 4.17 5.25 2.96 Mechanics, letter carriers, etc ■ 4.02 Railway postal clerks. . 5.07 Mr. Fairwbld. I do not know, gentlemen, that I have more to-say with regard to this matter. My purpose was to get very clearly before you the purpose of the bill. The Chairman. Mr. Fairfield, before you pass on from that subject — that, of course, is assuming that the retirement age would be left as it is in the present law, that is, these precentages. But if you reduce the retirement age to 60 you would again raise the Government's proportion. Mr. Fairfield. That is right. Now there are, of course, just two ways in which this matter may be considered : That is, for the employees to increase their percentages sufficiently to take care of the extra expense. Mr. Smith. Under the first plan, when would the Government be called upon to make appropriations? Mr. Fairfield. I really do not know; I think about 10 years. It is. estimated the funds will run at least 10 years or possibly 12 years before any appropriation will be made by the Government. The Chairman. Let me say in connection with that that Mr. McCoy, the actuary for the Treasury, says if the appropriations are deferred and the return of contributions and accruing annuities are paid from the employees' money now in hand and no appropriation is made until a period of about 10 years, when appropriations would be necessary, when the fund would be cleaned out — if that plan were pursued it would at that time necessitate an initial appropriation by the Government of about $100,000,- 000. Mr. Smith. And what would the appropriations be likely to be from year to year then? The Chairman. From then on they would be about two-thirds of the benefits paid out to one-third supplied by contributions, aesuming the $100,000,000 cleans up the back obligations of the fund which actually must at that time be met. Of course, there would still be carried on the books a liability of the Government not then called for, but to be met some time in the future — I can not say how soon in the future after 10 years— of about $206,000,000. Mr. Fairfield. It takes on really the nature of an insurance company which carries liabilities and which gets new people reinsuring and paying in their premiums and, of course, there is always a Government liability of that kind, as there is in an insurance company of that kind. Perhaps it will be well to state here that the Government's proportion is at least partially due to the fact that we are taking care of people who up to tliis time have made no contribution. The Chairman. Surely. Mr. Fairfield. Now, whether it is the Government's business or the employees' business to take care of the people who are retired under the present law or under any amended form of that law — whether the obligation is on the present employees to INCEEASE OF ANNUITIES "UNDER KETIEEMBNT LAW. 7 take care of them or whether that is an obligation upon the Government — is a problem to be determined by the committee. Sometimes employees may feel that they ought not to be thus called upon, but as a matter of fact, you have to begin sometime somewhere. You could not very well begin by first accumulating a fund for 25 or 30 years to take care of the fellows who are in, and the only way that could have been done would have been by putting them in classes and then giving to each class a credit for the contribution made. Mr. Smith. Then ypm bill contemplates after twenty-five or thirty years the fund would be self-sustaining? Mr. Fairfield. Without any increased payments by the Government. Now I am not sure that the provisions of this bill will guarantee that fact, although that should be threshed out in executive committee meetings, and very carefully, as far as that is concerned. Mr. Smith. It is the contention of the employees that are now in the service, and those that are being' pensioned, that the Government in initiating this new policy should bear the burden of expense. Mr. Fairfield. Well, I think it should for those who are retiring and who have made no contribution. I think the Government should bear that; I think it is an obliga- tion that is upon the Government and not upon the employees. But I have a num- ber of letters here that I shall not read, but I want to read some of them in executive session. I do not think I should read them here. I have letters from a number of organizations that show the spirit of the employees, that they are so heart and soul in sympathy with caring for the older ones that they are willing to assume the burden, if necessary, and, of course, with us it would be a question of whether justly that burden should be saddled upon them. That is the real problem. Of course, I am very frank to say that in my judgment, if this amendment is to succeed, there will have to be some increase in the amount paid by the employees. I think with the Treasury in the condition in which it is at this time, or perhaps at any time, we should recognize that this is a system of old age insurance and that the Government ought to make some contribution to it, in my judgment, particularly inasmuch as hitherto there has been no legislation on the subject.^ That we ought to make some provision by which the employee would know that the Government had in the first place given him a wage sufficient for him to live on and then have taken out an insurance premium from year to year so that he would not have the haunting fear of poverty in old age. Mr. Smith. That would be an old age pension at the expense of the employees after the Government takes care of the initial payment? The Chairman. No; the Government would still contribute. Mr. FiARFiBLD. The Government would still contribute substantially. I have ho idea of relieving the Government, and I base that on these gToiinds: You do pension them whether you pension them by absolute appropriations or whether you. pension them by retaining them long beyond the years that they are serviceable. And Jim Mann made a speech on that subject. Some man in opposition to the retirement law in the first place said, "Why don't the heads of the departments, when a man be- comes inefficient, cut him off"? And Jim Mann said this — and all honor to him — "It is because of the human heart, and men will not do it. " And my advocacy of this retirement law in the beginning,- my advocacy of making it efficient, is with the firm conviction that so much as the Government is contributing is an economic proposition and that in the long run it will cost no more, if as much, by giving the employees an opportunity when they feel the weakness of old age or inability to retire and put new blood into their places, and the hopeful spirit in which they will work will give to the Government in my judgment better service. Mr. Smith. How about the man of 60 years of age who is not feeling the burdens of advancing age and is in the full vigor of life? Mr. Fairfield. He will not retire, because he will not be compelled to. He can go on to 70. I would not put in that he should retire, but he will have his salary and go on to 70. . * ' . Mr. Smith. But this bill, I understand, would perimt a man at 60 to retire? The Chairman. Yes. Mr. Fairfield. I think I have nothing further. The Chairman. The committee thanks you. Congressman Rossdale is present and has a bill before the committee. What is the number of your bill, Mr. Rossdale? Mr. Rossdale. H. R. 9853. INCREASE OF ANNUITIES UNDER RETIREMENT LAW. STATEMENT OF HON. ALBERT B. BOSSDALE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK. Mr. RossDALE. Mr. Chairman and members of the committee, I did not come here this mbming prepared as I would have been had I known that this matter would come up, and the tables with the figures I have carefully prepared are in my office in New, York, and so I shall have to just make a statement of the conditions as I know them and point out what I think are necessary changes to the present retirement act. I have listened to my good friend Judge Fairfield with a great deal of interest; we all love and esteem him, and I have a great deal of respect for his opinions, and generally I am in accord with the judge, but in this instance I am somewhat out of tune with him. I know the high purposes which actuate him and I know that it is his intention to improve the provisions of the retirement act in that we are in accord. I know the judge has given a great deal of careful study to the question, but the question of gov- ernmental employment and of retirement is a very deep question, aiid it requires a study of years, and unless one has really lived through it all, I question whether he really can understand the depths to which this problem goes. My kno'wledge of civil service conditions was gained through 10 years of experience as a Government employee. I have lived all through what these men here who pre- sumably are interested in this bill are facing. I am cognizant of all the conditions; I know what employment in the Government service means; I know the sacrifices, the trials that these men go through; I know the kind of conditions under which they live, under which they work; and I know these conditions from practical observation under which the present act presumbaly retires them. And, with a knowledge of these conditions, I felt that it was a duty incumbent upon me as a Member of Congress • at the present time to endeavor to bring about some change in the retirement act which would alleviate conditions. I have not contemplated nor do I contemplate any raid upon the Treasury. I know that the men who advocate retirement, those who are in the Government service, contemplate no raid upon the Treasury nor do they make any unreasonable requests. They ask something that in my opinion they are entitled to ask, and that is a sacred and firm obligation on the part of the Government to give. When a man enters the Government service he takes an oath no different from what a man who enters the military service of the country takes, to support the Government even with his life, and a large proportion of them do dedicate their lives to the service of the Government. The conditions of service of a Government employee are such that rarely, if ever, does a man or woman save or have any competence at the end of a long period of Government employ. These conditions have always been such that in the evening of their lives these Government employees are usually penniless, for there is no such thing as large salaries in the Government service.' We Members of Congress, when we look over the appropriation bills and read at the head of each bill $5,000 a year and $6,000 a year and see a list of 10, 20, 30, or 50 of such salary items, we are apt to get a wrong impression, because the executive branches of the departments specify each particular position, and they are only the higher executives, and that gives the impression to Members of Congress that large salaries are prevalent in Government serivce. It is just an illusion, gentlemen. Low salaries, so low that one can not even live decently on them, are the rule. I know what they are in the great branch of the Governinent service in which I was once employed — the Postal Service. It was then and is yet a starvation wage. Some of you gentlemen come from smaller places where the pressure of living is not as great as it is in the larger places, but in the larger centers of population, in the great cities I mean, the average maximum salary in the Postal Service, and even in the other branches of the Government service, would be from $1,500 to $1,800 a year. That is about the average. It is not $4,000, $5,000, $6,000, or $7 000. Those are highly paid executives who are doing executive work, and this bill is not exactly in their interest, although I hold nothing against these men, because they are rendering good service to the Government; the retirement act is not intended especially for that class of men, because generally they pass out with the different administrations. A great many of these positions have a political complexion to them; that is, not in their duties, but they are members of whatever organization is in power and they generally change with the administrations, and only a small percentage, possibly one- third of them, remain through the different administrations and become eligible to retirement. But it is of the rank and file, that great army of hundreds of thousands — I have not the figures here, but there are many hundreds of thousands of men that I have in mind and that I believe this committee had in mind when they first framed the present retirement act. The present retirement act was a splendid forward measure. INCBEASE OF ANNUITIES UNDER BBTIBEMENT LAW. 9 In the years I was in the Government service I looked forward to the enactment of such a law and T was very happy indeed when it was enacted. But, as my good friend -the judge has said, it is not perfect legislation. It could not be perfect, because we had nothing to base it on, and the wonder is that it is as good as it is. But as good as it is, or as bad as it is, it is plainly patent that it requires amendment. At the present time the Government has not contributed any money toward it, and we have been, as my good friend, the judge has said, paying those who have retired under the provisions of the act to date from the money contributed by all of -the men, and there will be a day of reckoning unless some provision is made for the future. Figures are figures and can not lie, and there is no question of the truth of that. The chairman of the committee is entirely correct in his statement made to me that if we keep on going as we are or have been the time will come when Congress will have to make provision by the appropriation of a large sum, and for that reason I •do not think that we ought to leave it to the next generation or to the Congress of a decade hence to do all of the appropriating. I think it is the duty of the Government to bear a fair share of the cost at the present time. I think that was a structural error, if I might use that term, in the present bill when it was enacted, and that it should have carried with it some contributory provision by the Government. I do not think that the American people want these men and women to retire themselves; that is, to pay their own retirement insurance. I said years ago that if the Government is not going to be a factor in retiring its employees, what is to prevent the employees from retiring themselves, collecting from their own money, and doing it on their own accord. Of course, there might be some administrative expense attached and I do not advocate that by any means, because I think it is a solemn obligation on the part of the Government to do tliis. Before I proceed further I want to reply to what the judge has said about those who were retired to date and who contributed very little, if any, to the retirement fund from which they are now receiving an annuity. In that connection I want to say that there is a solemn debt obligation on the part of the Government, to many of its employees,, and that if these men and women now being retired did not pay a direct sum into a retirement fund, they did pay by reason of the many years of their employ and service something that was more precious than money, that was long hours of labor, for which they never received any compensation. Mr. Fairfield. Will the gentleman yield? Mr. RossDALE. I yield. Mr. Fairfield. I had the same thought in my own mind, and while I mentioned it as a fact, I think I said I felt it was the Government's obligation. •Mr. RossDALB. I do not speak in a spirit of criticism. I want to bring out a feature that does not prevail in Government employment to-day. In most branches of the Government service the 8-hour day prevails, and not often does a man or woman have to work more than eight hours a day. That condition did not prevail years ago; that condition was not in , effect during the many years that these men and women who to date have been retired, worked in the Government service, I can clearly recall when it was a daily condition of employinent to work 10, 12, and 14 hours. I myself have worked 16 hours. I can recall working a 12-hour shifV-night work, gentlemen, not day work — and at the expiration of that 12-hour shift my chief, a kindly man, coming around and sajdng "Don't falter boys, the worst is yet to come; we have another six hours to go. " . ., , We received no compensation for that service. I c&,n remember many years of Sunday work for which we received no compensation. In the service where I was employed it called for working every second Sunday, and if the conditions were such as they frequently were during a good portion of the year, for we were always busy, the chief would come down and say "All down to-morrow, boys," and we would work six or eight Sundays consecutively. We never got a cent for that extra labor. And so as I sav to you gentlemen of this committee, most all of the men and women in the different 'branches of service gave to Uncle Sam thousands of hours of labor without compensation, and they are entitled to consideration because of that. They have discharged their obligation to the Government, they have given the best that was in them during the productive years, and now in the evening of their lives Uncle Sam has an obligation to make some provision for their old age, and it would only be fair play and decency on the part of the Government of this country to say to these "Well done, thou good and faithful servant. Thou hast been faithful over a few things. I wili make thee ruler over many things. Enter thou into the joy of thy That is the attitude the Government should take. We can not afford to act in a way that we probably would in a court of law and plead statutory limitations. There INCEEASE OF ANNUITIES UNDER KETIKEMBNT LAW. is a higher, court than this; that is the court of public opinion of America. The American people want the Government to be reasonable in its treatment of employees and this committee wants to be fair to them. I know no fairer or finer set of men — I do not like to unduly praise my colleagues, they do not need praise, but I know what they have to contend with when they have to report bills out on the floor of the House, and it is not always a pleasant or easy matter to bring a bill on the floor of the House and have to fight it through against the opposition of a majority of the House. I have spoken at length and I do not want to take up too much of the time of this committee, and so I will point out two salient features of my bill that I believe will do away with a good many of the complications that may follow as a result of my good friend the judge's bill, and I leave it for your kindly consideration: "That beginning ninety days after the passage of this act, all employees in the classified civil service of the United States who have on that date or shall have on any date thereafter, rendered at least thirty years of service, computed as prescribed in section 3 of the act for the retirement of employees in the classified civil service approved May 22, 1920, shall be eligible to retirement with annuity equal to 6.0 per centum of such employees' average basic salary pay or compensation from the United States for the ten years preceding the date on which he or she shall retire: Provided, That in no case shall an annuity exceed $1,080 per anniun or be less than 1360 per annum." Now, gentlemen, this calls for a 30-year service period, optional, of course. My reasons for bringing in an amendment of this kind are that I believe that the service period plan is the best and the only system whereby you can fairly determine a proper time when a Government employee shall be retired. At the present time we have the age period. The age period is harsh, unfair, and, in my opinion, unworkable, because one man in more fit and able to continue employment at 65 or 67 or 70 than another man at 50 or 60, and a 30-year service period means that a man or woman has given 30 years service to the Government and because of that 30-year service period he or she becomes eligible to retirement. Of course, if they are fit to go on they do not retire. They have the option, however, of retiring. At the present time in the Eailway Mail Service it is 62 years of age; in the other branches of the service, the letter carriers, clerks, etc., it is 65. Now I have known many cases of men who i:eally became superannuated at 50, sometimes from the nature of the work, sometimes from physical conditions that have nothing to do with the service, but if they have given 30 years of service to the Government I believe the time has arrived when they should be eligible to retire if they desire it. In all municipalities throughout the country the periods of service are anywhere from 20 to 30 years. In the city of New York a fireman or policeman becomes eligible to retire in 20 years; occupations not carrying with them the hazards of those two become eligible to retire at 24 years, and I think 30 years is a fair time, but if the committee should differ with me and figure that 30 years is too short a retirement period, I would accept an amendment of 32 or even 35, but I do not think we ought to go beyond 35; I am not suggesting an amendment beyond that because I think the 30-year period is the proper and fair one, and I do not think we ought to wait until a man reaches a period — I will cite a condition which might explain what would proba- . jjlyhappeninmanybranchesof the service. , Three officials of the Government service in New York City, through some happening in that particular department they were in, but through no fault of their own, were threatened with removal — called upon to show cause why they should not be removed from the service. None of them had reached the age retirement period for supervisory employees. One of them had been in the service 41 years, another in the service 43 years, and I think the other was in the service 44 years. I have not the exact years of their service. But they were all over 40 years. Now these men were not yet eligible to retire under the present act, and yet if they had been forced out of the service they were too old to find any employ- ment elsewhere because industrial employment does not want old men, and we are all going to be old some day if we live. Many of these men have been actually thrown out of the service without compensation, as in the case I have just cited. Just think of it, after faithful service of 40 years in the employ of the Government, beginning in a minor form of employment, working up to heads of their bureau, they are thrown out without any kind of provision for their future. If there had been a service period for retirement these men and women could be retired with something for their old age, to which they are clearly entitled; and it is to take care of such cases that it is urgently necessary that a service period be sub- stituted for the age period. Mr. Lyon. May I ask a question? Mr. RossDALE. It is only to this extent that a man could retire after 30 years' service regardless of the present age limit. INCEEASB OP ANNUITIES UNDER EETIEEMENT LAW. 11 Mr. Lyon. I understand that, but you used the words "substituted for." Suppose * "J^^ j"^ service is 40 years of aee and remained there until he was 65 years of age and had to retire on account of physical disability; wouldn't he be entitled to an annuity? " Mr. RossBALE. Just the same as under the present provision. It does not change any oi the present provisions. Mr. Smith. Instead of fixing the eligibility to retirement for the age and length of service you would have it length of service. Do you not think you ought to have it age or length of service? Mr. RossDALE. The age limit remains in the bill as at present, because I think it IS a very wise provision. It simply affords an alternative of a service period. Mr. Smith. You are substituting service period for age. The Chaikman. No, he is not, Mr. Smith. He leaves the original law as it is and adds thereto a 30-year service retirement period at 60 per cent of the average pay for the last 10 years. ^' ^ Mr. Smith. He used the word "substituted." Mr.RossDALE. My use of that word probably confused you. I want to say in draw- ing the amendment I have followed the language, words, and terms used in the orig- inal act. The Chairman. Does that apply to section 2? Mr. Rossdale. Not quite. My purpose in bringing that in was td bring out clearly and make known a condition that unhappily exists in the Government service that I did not think was intended by the framers of the act. The Chairman. If you will pardon me, Mr. Rossdale, I thought it was an ingenious way of drawing the bill. Section 1 is the bill and section 2 is tfie speech in favor of it. Mr. Rossdale. Sometimes, as you know, Mr. Chairman, gentlemen of the House have to resort to expedients like that. Mr. Smith. You would be willing to have section 2 eliminated if we report the bill? Mr. Rossdale. Very willing, and glad to. The other feature of this bill raiising the maximum retirement from $720 to $1,080 — $1,080 would be 60 per cent of $1,800. I do not think that is too much money to retire an employee on. In the large cities of the country the average rental for which a poor man can secure a home is about $600 per annum, and that is not a very comfortable home. In my city of New York a five-room apartment with just normal comforts — I do not mean an up- to-date or modern apartment — costs $600 or $700 in a poor, cheap, workingman's neighborhood. Now, how can we expect to retire a Government employee with a family on $720 per annum? From what I have observed and from personal cases that I know in my own home city, almost every one of these retirements has been a tragedy. The statement that I incorporated in section 2' of my bill is an acknowledged fact. We do not like to think that we have been as harsh in retiring our employees as we have been. Why, I have gone down to the piers along the water front of New York and tried to secure jobs for retired Government employees as watchmen, etc., on the piers, and some of them were men who were hardly able to stand very long on their feet, but these men had to live and could not get along on their retirement pay and had to accept what employment they could find. If we are to retire them at all, let us retire them on sufficient salary or retain our old system of retaining superannuated employees as we did in the old days. At least, it would be human. Of course, it would not be to the advantage of the Government to keep superannuated men in service, but it will keep them from starvation, and that is more human then throwing them out on $720 a year. Mr. Smith. Does your bill provide for retiring a man of 50 in fine physical and mental condition if he has served 30 years? Mr. Rossdale. Very seldom does a man in the Government service have 30 years' service at 50 years of age. The average entrance age is 21. Under those conditions a man of 51 in good physical condition wouli not find it to his interest to take advan- tage of this retirement act, becau'se, being in good physical condition, he could not get along as well on the smaller retirement pay of 60 per cent, and it would be to his advantage to remain in service and get the full salary. Mr. Smith. A man might retire at 51 and in two years be a Member of Congress. Mr. Kline. Mr. Cannon is 86, is he not? Mr! Rossdale. Mr. Cannon is a wonderful man. Most men in Congress have led very energetic lives _ ' Mr. Smith (interposing). Most of our most valuable men in the executive and technical branches are over 50 years of age. 12 INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Mr. RossDALE. That is true, but those employees that are employed at that age do not want to retire, and this bill is not drawn up in their interest, because it will be to their advantage to remain in the service, and the men and women that we want to take care of are those who are not able to carry on and go through further. Mr. Smith. But your bill does not contain any such provision. Mr. RossDALB. That is true, but in effect and in operation it will be thus. In most Government service, by reason of the routine that occurs, after being in the service many years they are unable to obtain outside employment because, as- everyone presumably knows, when a man or woman goes to look for a job and he is asked, "What did you do before?" and he replies, "I was in the Government service." Well, that man or woman does not have to say anything more, beca,use the employer does not want him, because that is all he knows, that particular thing he worked at while in the service. He may be expert and invaluable to the Government by reason of his knowledge of his own occupation, but in private employ they do not want him, with the exception, of course, of technical experts in some special lines. Mr. Fairfield. Tax computation. Mr. RossDALE. I mean in a technical capacity. Mr. Smith. You know, Mr. Hossdale, there is a great deal of prejudice against Army officers going into private employment and competing with private employment. Mr. RossDALE. Rightly so. Mr. Smith. If you follow out your principle, you will have a lot of civilians on the Government pay roll competing for private employment. Mr. RossDALE. I left the service to go in business for myself, and at the end of the year I was between the devil and the deep sea, and I wanted to get back to my old job, but was afraid to go back and tell my old associates I was a failure, so I kept on looking for a job. Mr. London. So you came to Congress. Mr. RossDALE. That is more than 10 years back. When I told them that I had been 10 years in the post office they threw up their hands; they didn't want a man like that. So I was compelled to go back in business, and happily I have been suc- cessful, and so much so that I could afford to serve Uncle Sam again. You see, getting on the pay roll is almost a habit, gentlemen. Once you get there you are inclined t5 stay there, and I had to come to Congress to get back. Mr. Kline. Would you pension Congressmen? Mr. RossDALE. I would pension Congressmen if their length of service warranted it. Gentlemen, I have taken up a lot of time, and thank you for your attention. I would like, with the consent of the chairman and of thg committee, to file certain figures and data to substantiate my statement, which I was unable to file to-day. Mr. Smith. Will you send in the probable appropriations necessary to carry out those plans? Mr. RossDALB. I shall be glad to tio so. The Chairman. We will be glad to hear from you. Mr. Fairfibld. May I just make one little statement? I think it is fair to state that the bill I have introduced practically takes care of all the points that have been made by the gentleman who just addressed us and is in harmony with the judgment of the Board of Actuaries, and I can very readily assent to what he has said. The Chairman. We will hear from Representative Dallinger. STATEMENT OF HON. FREDEKICK W. DALLINGER, A REPRESENTA- TIVE IN CONGRESS FROM THE EIGHTH MASSACHUSETTS DIS- TRICT. Mr.' Dallingbe. Mr. Chairman and gentlemen, I want to speak in favor of Mr. Fair- field's bill, and I shall not take up your time for more than a minute. , In regard to this whole question of pensioning of Government employees it has always been a mystery to me that any legislation on that subject was so long delayed. The great corporations of the country, the big business that is attacked so savagely, the Standard Oil Co. and other corporations of that kind, pension their employees and have for years, and the contribution that those corporations make for that purpose is very much larger in proportion than the Government makes, and not only that, but in many cases I know of they pay the pension entirely — the corporation does. Mr. Smith. It seems to me you should substitute the words "retirement pay'' for "pension." That pensioning proposition I do not think appeals to a great majority or the civil service employees and officers of the Government. Mr. Dallinger. Well, retirement pay. Mr. Smith. Retirement pay, yes. Mr. Dallingbe. These corporations call it pension. I say take care of the old em- ployees. INOBEASE OF ANNUITIES UNDEK BETIBEMBNT LAW. 13 Mr. Smith. A pension implies a gratuity, and retirement pay implies something they have earned, so I do not like the word "pension" when you talk about Govern- ment employees, and that is the way the bill is drawn. The Chairman. The law calls them annuities. Mr. Dallinger. You can call them what you please. I am simply saying that the United States Government ought not to be behind private business corporations in taking care of the superannuated employees who have done faithful service to build up the business and make the profits of those corporations possible. I am m favor of this bill, but there is one section in it that I am particularly inter- ested in, and that is section 3: As a result of the Conference on Limitation of Armaments there has happened recently a wholesale discharge of Government employees who have rendered long and faithful service to the Government. I know of many cases in Massachusetts where men who have worked faithfully for the Government for 30, 35, and in some cases 40 years and have not yet reached the age of 65 years, have been discharged. As has been said by Mr. Rossdale, it is practically impossible for those men to get employment, and something ought to be done as a matter of humanity and as a matter of justice to take care of those men. As I understand it, section 3 is intended to provide that those men under 60 years of age shall have the right to retire with a less annuity; in fact, I am satisfied that in many cases men have been discharged just before they reached the age limit so the Government would not have to pay them the compensation to which they were entitled, and I think that any private corporation that did a thing of that kind would be held up to public scorn and obloquy, and I do not think the United States Govern- ment ought to do that sort of thing. I believe where a man has given faithful service, even for 20 years, and is thrown out of the Government employ because of an exigency of this kind, some provision should be made, and I sincerely trust that this committee will consider the circum- stances which now exist. Here are men who were in the Bdston Navy Yard, for in- stance, or the Watertown Arsenal, both of which institutions I am familiar with, and have served the Government all through the Spanish War and all through this Grea,t War, and who stayed faithfully at the positions at very much less pay than they could have gotten outside. I happen to know that the compensation of those employees was not raised until long after the compensation in private concerns was raised, and they were reduced very much more quickly, and now because of the fact that we want to dismantle our vessels and are going to reduce our military and naval establish- ments way below what it was ever contemplated would be done before this successful Conference on Limitation of Armaments these thoifsands and tens of thousands of men ought to have some provision made for them, and I think Mr. Fairfield's bill a fair and reasonable measure. Mr. Smith. Are those men in the classified service? Mr. Dallinger. Yes. Mr. Smith. Navy employees? Mr. Dallinger. Yes; unless I am wrong. The Chairman. They are. Mr. Dallinger. All of those men have civil-service ratings? The Chairman. Yes. Mr. Dallinger. And all these men who have served any length of time have that rating? The Chairman. Oh, yes. Mr. Dallinger. Of course, there are laborers hired just for a time if a vessel comes in and they have to have extra help on it; they may hire unskilled labor for a short time and then discharge them. But the men I speak of have done faithful service to the Government and their condition is pitiful to-day and something ought to be done, and I trust this committee will bear that in mind, because any big private corporation, in my opinion, would make some provision for them. Mr. Fairfield. Mr. Chairman, right in connection with that I have a clipping from the Washington Herald here which gives the names of a number of men dis- missed from the Washington Navy Yard whose service ranges from 35 to 45 years, r think data of that .kind might very properly come before the "committee, and I ask the privilege of having this inserted in the hearing. The Chairman., It will be so ordered. (The clipping is as follows:) "Following is a list of names of men with long-service records m the local yard: "William C. Peake, 310 North Carolina Avenue SE., 33 years in service; John Jones, breech mechanism shop, 28 years' service; H. M. Reynolds, 304 North Caro- 14 INCREASE or ANNUITIES UNDER RBOaREMENT LAW. Una Avenue SE.. 32 years; Walter Ford, 1424 A Street NE., 18 years; E. H. Bailey, 325 Thirteenth Street SE., 29 years. f ' - "A. O. Bond, 98 Bryant Street NE., 23 years; William Thompson, 1028 South Carolina Avenue SE., 32 years; E. R. Maxwell, Seventh, Street and Maryland Avenue NE., 35 years; H. C. Devault. Ahacostia, 25 years; Samuel Miller, 309 North Carolina Avenue, 33 years; Frank Crest, 1114 E Street SE;, 31 years. "William Flood, 756 H Street SE., 44 years; Otto Zable, Mount Ranier, Md., 1*5 years; Jack Simering, 932 South Carolina Avenue, 31 years; Harry Stuart, tool shop em- ployee, 35 years. "Harry Stuart, jr., sight shop employee, 15 years; George Mocabee, gun shop em- ployee, 32 years; N. R. Grazes, 652 A Street SE., 29 years; J. T. Woodward, gun- carriage shop, 28 years; George Stewart, gun shop, 20 years. "As an instance of hasty action by Navy officials union representatives cited the ease of Lewis Dorsett, 736' Thirteenth Street SE., who, it is said,, was employed in the Navy Department as a copyist draftsman. Heaigning that position to accept a similar one in the navy yard last Wednesday, he reported for work one day and was furloughed the day following." The Chairman. Congressman Ten Eyck, do you wish to be heard now? STATEMENT OF HON. PETER G. TEN EYCK, A REPRESENTATIVE IN CONGRESS FROM THE TWENTY-EIGHTH DISTRICT OF NEW YORK. Mr. Ten Eyck. Mr. Chairman and gentlemen, I do not intend to take up a lot of time to-day in presenting my bill H. R. 10033, because I have a gentleman with me whom I intend to introduce later who will go into it in detail. I might say I am thoroughly in accord with the remarks of the gentlemen who preceded me to this extent, that I believe we all are working toward the same goal, which I feel we ^vill attain sooner or later, and I hope sooner. I do' not like the word "pension." Mr. Kline. Pardon me. That is not used here, is it? It is "annuity." ■ Mr. Ten Eyck. It has been used heretofore. Mr. KiitNE. There is nothing about gratuity, and that ie why I do not like that word. The law itself uses "annuity." Pardon me, but we have gone over that two or three times. Mr. Ten Eyck, I want to proceed with my statement in the way that I can best bring to the attention of the committee my idea. I feel that this bill covers an adjustment of claims for deferred payment^g over an accumulation of years against the' Government for long service performed, that we must not consider it a pension or anvthing else but a direct payment, Mr. Chairman. I wish to state in relation to my bill that I am perfectly willing, for you to consider it as an amendment.to the retirement act. , ' ' ' I have with me a circular which I received setting forth some reasons in favor of the act, which I would like to have inserted in the record. I do wish to call to your attention, however, paragraph Class A shall include all employees to whom this act applies who shall have served the United States for a period of 30 years after they have become 25 years old. I might say in relation to that paragraph that its intent is to a certain extent to protect the man who starts to work at 16 and at the expiration of a period, of 30 years' service, his age then being 46, it gives him an opportunity to continue on thereafter. Now, gentlemen, I am going tp introduce to you a gentleman with whom I have consulted in relation to the drawing of this bill. He is president of the Twenty-year Club in the Watervliet Arsenal. He has served the United States Government for 31 years, and I know personally that he has, rendered this Government services at certain critical times that can never be repaid, and I take great pleasure in introducing to you to speak in behalf of this bill and myself, Mr. John P. Dorney, of Watervliet. The Chairman. The committee will hear Mr. Dorney at the present time. STATEMENT OP MR. JOHN P. DORNEY. Mr. Dorney. Mr. President and gentlemen of the committee, I represent directly the Twenty-year Club of the Watervliet Arsenal, but indirectly I represent very many employees and members of other organizations unattached — by that !• mean not as- sociated jwith the national or internatioiial bodies or affiliated with the American Federation of Labor, but simply that they are unattached, but through correspbndence which has been ha<^ and throtigh various conferences wMch' have beem brought about in the cities of Troy, Albany, and CohoeS with varioils Federal civiLservice employees INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 15 for the purpose of ascertaining what was most desirable and what was possible of accomphshment toward an improvement of the present retirement law. Throughout this correspondence and through all of the conferences that were held the suggestions ' were many and various. I assume that the Committee from time to time has heard all that might have been brought before those conferences, and I do not propose to take up your time with a recital of the many recommendations and suggestions that were made, but for the purpose of properly bringing befone the committee my reasons for advocating the measure introduced by Mr. Ten Eyck, No. 10033, I would like to •enumerate just a few of the arguments introduced at these conferences. One was that the present law was inequitable in that the employees who were re- ceiving $5,000 a year were required to pay into the fund four times the amount a man receiving 11,200 per annum paid, and in the minds of the advocates of those complaints it was argued it should be amended to create a readjustment of the rate. Another was that the civil-service employee was, without exception, engaged in productive industry and should be accorded more consideration than a man engaged in the military service whose only production was of expense tp the Government. Of course, we recognize the necessity of the military service as a matter of defense, etc., but all those in the military service are granted — there we will have to use the term "pension, " after a period of 30 years, regardless of their attained age, regardless of their value to the service. They are compelled to retire at 33 years' service. Now, if an organization within the Government is granted such a privilege as this, why can not those who are producing something every minute of their industrial life in the service of the Government be accorded the same privilege? I am just repeating I these arguments. I Mr. Smith. Do you know what pension an enlisted man receives? Mr. DoRNEY. I am not familiar with that generally, but I do know'a man, a private in the Ordnance Service, receives a certain amount, and just before retiring he is ad- vanced to the position of sergeant and given $63.50 a month. That is a great deal more than those who have given all their industrial life to the Government are permitted to get under the retirement law. Another proposition that has been repeatedly presented and one very strongly argued before our conferences, was that at the arsenal, and, in fact, in all the industrial ins.titutions in the country, there was constantly accruing to the Government an un- earned increment; that is, through the operation of the law of the prevaijing rate of wages that exists no industrial institution was permitted to pay more to its employees than the prevailing rate in the vicinity of the establishment; and inasmuch also as in every instance where a Federal manufacturing plant was permitted to have any work to do within this establishment they were compelled to compete with private manufacturers in order to get the work to prosecute in their plants, invariably they had to underbid the private manufacturers in order to get the work. Now, we know very well that the United States Government is not engaged in the manufacture- of those commodities it needs for its own purposes for the sake of profit. It therefore follows, if the United States Government is not engaged in manufacture for profit the amount which accrues to a successful manufacturer in the nature of profit, margins, and dividends would naturally under the circumstances accrue to the United States Government on those commodities it manufactures in its own establishments, and, consequently, where a man has worked for 30 years, for all of those years he has been piling up, whether the Government recognizes the fact or not, or whether the individual knows of that fact — he has been piling up that profit, and it should be piled up to his credit. I would like to bring to the attention of the committee that I am repeating what has been argued. I am not presenting arguments myself, but telling you what has been said before our conferences, to show what the attitude of the people is. Therefore, the Government owes to every one in an industrial establishment a retirement without cost to the employee. But in all of the correspondence we have had, which has been very voluminous, and in every conference which we have held, the very central thought and predominating opinion was that the United States Government should give to its Federal employees and provide in the retirement law for the retirement of the employee at the end of a 30-year tenure of service, regardless of his age. With this idea in mind, I think the chairman of this committee will remember he was corresponded with by the secretary of the Twenty-five-year Club at the Arsenal, and the opinion was expressed by Senator Sterling that Congress could not be induced at this stage of the game to pass any measure which would provide for a 30-year tenure of service and regardless of the attained age. Mr. KuNB . Db you know any large industrial institutions that retire their employees at the end of 30 years? 97037—22 -2 16 INCBJEASE or ANNUITIES UNDER EETIEEMENT LAW. Mr. DoRNEY. Yes, sir; the General Electric Co. Mr. JClinb . Even though they are in good physical and mental condition? Mr. DoRNEY. There is a leeway there that is also provided for in the existing'retire- ment law that the heads of departments or bureaus shall have the right to continue the service of that man for 2 years and continue it for 10 years. I Mr. Kline. To retire with pay? Mr. DoRNEY. Oh, no. You a*ked me, do I know of any industrial corporation? Mr. Kltne. Where they permit, their men to retire after a certain range of service regardless of age.and in the event they are still capable of performing their work? n, Mr. DoRNEY. No; I do not. I could not say that. Mr. Kline. Is not that what you advocate here with reference to the Government? Mr. DoRNEY. I am going to advocate that; yes, sir. I will try to show my reasons for advocating that later. I do not know of any private corporation, however, that does make provision like Senator Sterling wrote back, that Congress could not be induced to make such provi- sion for the reason a man would be in tiie heyday of his life and height of his vigor. Mr. Kline. Mr. BalEnger said they retired those men on pension. Mr. DoENEY. They do. Mr. Kline. That is only when they reach disability by age? Mr. DoRNEY. Where a man has actually become superannuated. Mr. Kline. And that is what we are doing under the present law. Mr. Dorney. Yes. Many Members of Congress when they consider a matter of this kind take the clerks or those engaged in executive departments, and it is very hard for Members of Congress to get right into the shops and see what the industrial employee is subjected to. Mr. Kline. A Member of Congress proceeds on the theory if no one has' objected everything is going smoothly. The initiatory steps are to be taken by the people who are not getting a square deal. Mr. Dorney. Yea; but I just say I believe from my experience, covering quite a number of years endeavoring to bring about a retirement measure, it has been my experience that very few Members of Congress have gone into the shops and know the responsibility that devolves upon the employee in the shops. The Chairman. Congress did have some thought of that in mind or it would not have made the difference between the mechanics and other Government employees with regard to retirement age. Mr. Dorney. That is true; that distinction has been made, and yet I think that hardly sufficient consideration has been given to that fact. When a man goes into the Watervliet Arsenal and works there successfully for a year that man has gained a reputation of being a skilled mechanic. The man must be there at his machine before the whistle blows in the morning and he must be there at his machine when the whistle blows at night; that man must carry on his work without a deviation of one one- thousandth of an inch. I am not speaking of little tool making, but of a piece in the machine that will weigh all the way from 50 to 100 tons and of measurements that go up to 42 and 46 inches in diameter. It is a place where a man must carry a delicacy of touch on a snap gauge up to one one- thousandth of an inch on shrink, and also on rifling a gun which is practically in the last stages of construction and where the slightest little condition of irresponsibility or carelessness on his part may ruin $100,000 worth of work in a jiffy. A man is always conscious of the responsibility that is resting upon him, and if a man has worked five years on that he has evidenced an ability which should naturally increase his wages if the Government was wholly just in its consideration of the value Of efficiency. But it is a very rare thing after a man has gone on for one year that there is any raise in his pay. He is subjected to the condition of the prevaihng rate of wages in the vicinity of that particular plant. Mind you, if a man is engaged at the Watervliet Arsenal, although he is only rated as a machinist he is required to do work way in excess of the precision required of the toolmaker employed in the vicinity, A toolmaker's pay IS 92 cents an hour and the machinist receives 62 cents an hour, but the toolmakers employed in industries adjacent to our plant could not begin to come into that plant and do the work that the machinists there are required to do. The same thing ob- tains in the Washington Navy Yard, the same thing obtains in every industrial institu- tion of the Government in the country. There is quite a distinction between the industrial work and the clerical work. I was going to say we had received word from Senator Sterling that it would be impossible to get it before Congress, therefore the bill that we should have would have to follow the line of least resistance and one that ,would meet the approbation of this committee and the approval of Congress. So we brought this bill here and provide m it from line 14, on page 2 of bill No. 10033, "Class A shall include all em- INCBEASE OF ANNUITIES UNDER E.ETIRBMENT LAW. 17 ployees to whom this act applies who shall have served the United States for a total penod of 30 years after they have become 25 years old." That seemed, in our judgment, to cover all the objections that might be met with in Congress or m the conmuttee. That puts a man at the age of 55, which is estab- hshed by the regulations of the United States Civil Service Commission, within the age of superannuation. In other words, it is not permissible to take a man in the civil service over 55 years of age, because he is assumed to be superannuated. There- fore we have followed the provision of the Government and say he is superannuated for the purpose of retirement at the age of 55, the same as it is provided that he is superannuated for employment at the age of 55. Because of the facts stated by the gentleman preceding me as to the expected reduction in the force at the arsenal and because we have men who have been 40 years in service and still have not reached the age of retirement, we believe there should be some provision made for those employees, and we brought about this pro- vision in section G, line 1, page 5: "Class G. — That whenever a Federal employee in the classified civil service shall have served the Government for 25 years or more and has attained the age of 55 and is separated from the"civil service through lack of work, reduction of force, or other causes not due to fault or negligence on his or her part, that such employees shall be eligible to the benefits of' the retirement law in the same manner and in the same proportion that is accorded like employees who have attained the required age limit for retirement." We believe this provision is wholly in accord with the opinion of those men who have opposed every other form of measure. We did not attempt to touch this from the monetary side. We believe this is for the actuarial side and did not go into that particular part of it, but did try to bo amend this bill as to meet the approval of this committee. Mr. Smith. Would it not be well to have a separate bill introduced to take care of these men? Mr. DoRNEY. I think it would be ad\dsable. I also think this should be made an amendment of the bill and not established as a bill, and that will be handed to the committee for consideration. I thank you, gentlemen. The Chairman. Mr. Alcorn is chairman of the joint conference on retirement and is the spokesman for, I think, a majority of those here. STATEMENT OF MR. ROBERT H. ALCORN, CHAIRMAN JOINT CON- FERENCE ON RETIREMENT, REPRESENTING UNITED STATES CIVIL-SERVICE EMPLOYEES. Mr. Alcorn. R. H. Alcorn, chairman joint conference on retirement, representing United States civil-service employees. I might say in that connection,"Mr. Chairman and members of the committee, that this conference, as you know, represents the ci\T.l-service org-anizations throughout the United States who were interested and did cooperate with this committee and Senator Sterling's committee in securing the enactment of the present law. I feel, without going into the subject very deeply at this time on the question of arnendments, that the bill introduced by Mr. Fairfield would niore nearly cover the defects and the weak points now in the present law than any bill that has yet come before the committee, and personally I should ask the committee for their very car-jful and serious consideration with a view in mind of giving relief to the greatest number as provided for under the bill introduced by Congressman Fairfield, without going further into any discussion of the merits of the question. I do not believe, Mr. Chairman, that the committee will be able to get through to-day, will it? The Chairman. No. , , , Mr. Alcorn. Then I would suggest, if it be agreeable, that we hear from some of the parties who are here from out of town, because those who are located here in the city could more readily appear at another date, if it is agreeable to the committee. The Chairman. Yes; I think that would be the proper procedure. Mr. Alcorn. If agreeable, I will introduce Mr. Black, secretary of the Retirement Association of New York. 18 INCREASE or ANNUITIES UNDER RETIREMENT LAW. STATEMENT OF MR. FRANCIS BLACK, SECRETARY NEW YORK NAVY YARD RETIREMENT ASSOCIATION. Mr. Black. Mr. Chairman and gentlemen of the committee, I think it is my first duty to thank you gentlemen for so kindly considering from a humanitarian point of view the men in the Government service in putting this present law on the books. I might extend my remarks to our present chairman. I might say the men in the New York Navy Yard who happen to come from the State of New Jersey are very proud of the feeling that the worthy chairman of the committee here is the father and sponsor of the present retirement law. ' ; I think the men of the Government service who are in the navy yards and in battle- ship construction are in a different class from some other parts of the Federal Govern- ment. In the battleship construction, gentlemen, you have adverse conditions to meet; you have all the elements of the weather to contend with, and you have your extreme cold, you have your extreme heat, you have the sleet, snow, and rain. Men have to work under those conditions. TKey are also confined to ai)artments where the noxious gases and fumes from the acetylene welders and electric burners are almost overpowering. I might state also that the men are compelled very often to work with pneumatic tools. You have seen them riveting these girders on the railways and elevators. They hold the machine against their chests and it is 90 pounds pressure, and there is no man at the age of 60 can do that. It is a big strain on the men and a man becomes prematurely old at 50, and at 40 may be as old as a man at 50 years of age. The work he is required to do brings on old age in that length of time. In the Government service at the present time you retire a petty officer, and he is allowed to retire at 16 years at half pay and after 30 years he goes out at two-thirds pay. Your enlisted men, both Army and Navv, goes out •without anv contribution at all. You have also in your service, th&t is, the civil end of it, the lighthouse and life guards that do not contribute one penny toward their pensions. That is really a pension; they get theirs for nothing. Ours is a contribution. The 2^ per cent, gentlemen, may not be sufficient. I do not like to quote this, but I have written a letter to our worthy sponsor of the present bill, H. R. 10246, and I told him that 1 believed a good red-blooded American does not want charity, he does want something for nothing. He is willing to pay his way. We do not ask this Government to' take down an enormous sum to keep this pension scheme going. I believe if we showed the right spirit and right willingness we would come across with what I consider liberal. That board of actuaries have in their report stated that our 2.50 contribution with a contribution on the part of the Government of 1.06, making a total of 3.56, will support your present pension law. Now I am only speaking for the navy yard, gentlemen. Others may differ with me on this, but the navy yard is willing to go one better than that. They will increase that 3.56 and go to 1.44, making it 5 per cent. Others in this conference may not be agreeable to that, but that is the sense of the navy yard. We are on record "for that, showing that we are of the proper spirit. We are willing to go more than 50-50. Now, I would like to enter this as a brief, gentlemen. It was entered as a brief before the Senate committee. It originated from the New York yard, Mr. Chairman, and is a very lengthy article. Doubtless most of you have got it, because I sent it to your hotels to be sure you would get it. I want to say I received a letter from Senator Sterling and I would like to let that go in as a brief, too, and Senator Sterling states in this letter that exceptions could be made for men employed in the navy yard. Senator Sterling is the father in the Senate of this bill, and so long as he is agreeable I thought it should be taken into consideration. With that statement, Mr. Chairman, I would like to enter this as a brief. The Chairman. It will be received. (The statement and letter are as follows:) United States Senate, Committee on Civil Service, November 29, 1921 . ' Mr. F. Black, Secretary, Maspeih, N. Y. My Dear Me. Black: I have your letter of the 26th, inclosing printed article entitled "The reasons why," etc., and in which is set forth' arguments for the retire- ment of men who have served 30 years but who are yet barely 50 or little more than 50 years of age. INCBEASE OF ANNUITIES UNDER RETIREMENT LAW. 19 I may admit that with certain occupations retirement after 30 years of service would be reasonable but it would be impossible now to secure legislation that would permit all employees to retire after 30 years of service. It may be that the act can be so amended that the men of the navy yard would be allowed to retire after 30 years of service. As I look at the matter now, I do not think I would oppose such a measure. Yours very truly, Thomas Steeling. (Brief submitted by Francis Black, secretary New York Navy Yard Retirement Association:) The Retirement Act. This article is intended for the purpose of showing the conditions a Federal employee has to contend with in line of battleship construction at any naval station that such is assigned to, in order to be eligible for retirement under present law now enacted,, and the reasons why an amendment should be passed, allowing such employee with 30j years of faithful service rendered, to retire at 50 years of age if he so desires. ! THE REASONS WHY. An apprentice, heater boy, or passer, at the age of 16 years, or a young mechanic or helper, at the age of 21 years, in any of the metal trade lines that constitute battleship construction, building, or repairing, upon starting at the above early ages to work, finds himself after working 30 years faithfully for the Government, during which long period he has a record which is untarnished in any respect, having never allowed himself to disobey any rule that would cause his appearance before his superior officer for discipline, confronted with the conditions of having to continue for another 19 years, if having started at 16 years of age as an apprentice, heater boy, or passer, as he will only be 46 years old, and if he started at 21 years of age as a mechanic he would only be 51 years of age and would have 14 years more to serve before arriving at the age of 65 years, which under the law as it now reads is the only age he can receive any pension for, although he must contribute at the rate of 2J per cent of his salary for 49 years, as in the case of the apprentice, or heater boy, or passer, or 44 years as in the case of the young mechanic, for the purpose, as the law stands, to allow other mechanics to retire at 65 years of age who did not engage in Government service until 50 years of age and only worked 15 years, and of their most inefficient years, and are retired while only contributing the said 15 years out of their salary at 2^ per cent, and if they retired August 20, 1920, only contributed 20 days. Still the apprentice can contribute 49 years before he has any privilege of retiring. He has given the most efficient years of his life and the best there is in him to his Government, while the mechanic or helper starting at 50 years of age gave to some other firm, who should have pensioned him at 50 years of age, instead of letting him go to the Government. In battleship construction a metal-trade worker has the most adverse conditions to contend with. He constantly has to contend with all the elements at all times — extreme cold, torrid heat, rain, snow and sleet, stuffy, closed compartments filled with noxious gases from rivet forges, electric welding machines and acetylene burners, ill-smelling inner bottoms filled with the stenches of corrosive paints, tar, and bitumastic. He constantly carries his«life in his hands, so to speak, as all kinds of objects are being lifted by cranes over him, around him, and below him; he constantly is climbing to dizzy heights on ladders and staging, and be he a riveter, chipper and calker, driller, or holder-on, he constantly has a pressure of 90 pounds of compressed air against his chest, or other parts of his body, to force along with; the terrible nerve-racking vibra- tion of the rivetina; hammer or machines; also the blacksmith with the excessive heat of the fiery forge, the iron molder with his hot molten liquid to pour and the fine molding sand, constantly being inhaled into his lungs; the coppersmith with the noxious cases he must continually inhale; the machinist with brass and iron fillings and filings filling his lungs; and the electrician handling the dangerous high voltage — all these conditions, coupled with the brain-racking noises, tend to keep the metal worker's nerves at high tension all through life, and when he arrives at 50 years of age as a rule, after working faithfully for 30 years, he is a physical wreck and ready for retirement, and if he can afford it, retires himself, as he knows he only has in his condition a very few years to live, and if a railway clerk is allowed three years deducted from the a^e limit of 65 years, although always in a raore even temperature and more cono-enial surroundings of a postal car, which deduction is allowed on account of th& constant vibration of car, then the metal worker, with the evidence herein submitted,. Should at least receive from 10 to 15 years deduction in his behalf. 20 INCE.EASB OP ANNUITIES UNDER EETIREMENT LAW. As the Federal employee has to contribute the entire amount of money to maintain the retirement act, there is no sane reason why he should not be allowed some say in the disposal of the same. The United States Government at the present time, along with other nations, is thoroughly discussing the disarmament question. Should any action be taken by our Government in this line that would cause a large reduction in the naval pregram, it would work severe hardship on the workers in battleship construction who have served 30 y^ars or more, and only 50 years or more of age, by being thrown out of employment in the physical condition they would be in, and would make it impos- sible at their age to secure employment elsewhere, with no retirement act to protect them. A chief petty oiEcer in the United States .Navy is allowed to retire on half pay after 16 years of service, two-thirds pay after 20 years of service; enlisted men, sailors and marines, from 20 to 30 years of service, and do not have to contribute anything to pension fund. Life guards, lighthouse keepers, and other branches of the civilian force are exempt from contributing anything. Why can not the metal worker have fair consideration and a say in amending the retirement act? , If anyone doubts the statements made in this article as to the physical condition of metal workers after 30 years of service, we have positive proof of cases where the worker is not yet 50 years of age and is a nervous wreck on account of constant Gov- ' ermnerit battleship construction, and the committee will produce at any time for proof a do^en cases which they themselves have become acquainted with from per- sonal observation. Another very excellent reason why a 30-year service bill should be enacted into law is that all young employees entering Government service should be given to understand that if they prove thoroughly efficient, honest, and loyal to the Govern- ment throughout the entire 30 years of service, that at the expiration of that period of time they are to receive a just and suitable reward in the form of an annuity for services rendered — the annuity to be contributed by employees from their salaries at the rate of 2^ per cent of salary, and if this amount is not sufficient to carry on the pension fund, it is the consensus of opinion of navy yard mechanics, as expressed at a recent meeting of the retirement association, that the deduction be increased to 5 per cent and interest of 4 per cent, as is now being paid on refunds, be eliminated, thereby making it possible for a 30-year service employee to enjoy the remaining few years of life in bodily rest and contentment of mind, allowing the constant high tension of his active life to relax, surrounded by the comforts of home. This is justly due the faithful employee for loyalty duriiig the troublesome periods of the Spanish and World Wars, as well as in times of peace. No employee should be made to mark time for 14 or 19 years in addition to their 30 years of service simply because they are the unfortunate victims of circumstances by not having reached the 65-year age limit. It is also an injustice to cause them to con- tribute out of their salaries for 14 or 19 years longer, the 2 J per cent that another em- ployee entering the service at exactly 35 years of age— a very late date in life to start. To cause an employee to serve these 14 or 19 extra years would seem more like a penalty than a just reward to the employee. We as navy yard employees think and feel that the services rendered during the late war, when Uncle Sam so sorely needed us and we so staunchly and vahently gave him our support and the best there was in us, should now, when disarmament is about to abolish our positions, our Hfelong livelihood without an^ protection whatever, although we have served the prescribed 30 years and are about 50 years of age or more, yet not near the 65-year age limit, find we are not allowed, on account of civil-service rules, to enter examinations for any other'positionsinany arm or branch of the Govern- ment service, as we are over the 45-year age limit. We hope Uncle Sam will stand by us in our predicament as we stood by him in war. In the name of disarmament we ask that the Representatives of the United States Government now assembled in Congress hear our petition, and use their good offices in our behalf by lowering the age limit for civil employees to 50 years or less, who have completed 30 years of honorable service. In conclusion let it be said that it is a well known fact that the general public at large is constantly laboring under the impression that the Government employees are receiving, through the benevolence of the IJnited States Government, a pension derived from taxation of the general public at large. Though Congress has unconsciously created this impression by passing the annuity law and laws governing the same,' it should be thoroughly understood this is not the case, as all the monevs to date to create and support this fund, is a direct contribution from the Federal employees' salary and, according to actuary report, there is at this date a surplus of $9,000,000, all of which, after retiring over 7,000 employees the first year, has been the contributions of the INCREASE OF ANNUITIES UNDEE RETIREMENT LAW. 21 Federal employees. Annuity means the employees contribute the amount themselves. Pension means charity. We do not ask for charity, nor do we receive any charity — simply our own moneys. We are willing to contribute twice the amount of 2^ per cent if we only could, like Congress, have a voice in the disposal of our own moneys in the form of a liberal annuity law of 30 years' service and minimum age limit of 50 years or less, and the right of leaving it to the discretion of the employee as to whether he wishes to avail himself of the same. Mr. Black. In closing my remarks I want to say we are heartily in favor of the bill introduced by the honojable Mr. Fairfield, of Indiana, and I believe two sections should be taken especially into consideration at the present time, and those are these: You are all acquainted with the present condition of the navy yard. Men are getting out of our yard at the present time after 32 and 35 years and have not reached the age of 65. Mr. FAiEriELD. You mean having served for 32 to 35 years? Mr. Black. Yes, sir. I do not believe, gentlemen, the Government wants that done, and I believe that clause in that bill is elegant. I heartily agree with it. I believe it suits the biggest part of the men. Some of the bills introduced here — we have one ourselves introduced by Congressman Kline and Senator Calder, but we are willing to withdraw those bills; that is, we are willing to withdraw our separate bills at the present time and give way to your present bill on the table to-day, and I do hope, gentlemen, that you will give that consideration, especially that clause taking care of a man 15 years in service, and if he gets separated from the Government that he get an annuity certificate and be allowed at the age of 60 to come back and claim the pension. I think that is a most wonderful clause, and I hope it prevails; and I do say 65 is entirely too old for an employee of the navy yard in shipbuilding conBtruction,because a man is doing dangerous work, especially in the blacksmith shop, where he has tons and tons of white metal and four big colored huskies helping him, and that man gives the orders, and one slip might mean the killing of those four men; and down below decks on board ship a big crane hoisting big guns over their heads, and there might be a slip and kill them. You might think we were working in the hospital if I were to tell you all the ills in the navy yard. Nevertheless, I thank you gentlemen very kindly, and hope you will give support and trust you will report out 10246. I thank you, gentlemen. Mr. Alcorn. I would like the committee to hear Mr. W. H. Fairness. STATEMENT OF MR. W. H. FAIRNESS. Mr. Fairness. Mr. Chairman and gentlemen of the committee, what I will say will be very brief and it will all be in favor of the bill as introduced by Congressman Fairfield, of Indiana. It will be in favor of that bill and that bill only because of this fact, that we had this bill presented to us at the Norfolk Navy Yard; the retirement association had a meeting and we read the bill over section by section, line by line, andwreed that that was the nearest to the thing we needed of anything we had read or seen introduced either in the first session or during the present session of Congress, and I was selected to come here to represent that spirit. I listened to what all of the gentlemen had to say this morning with a great deal of interest I heard the statement made that perhaps in 25 years the United States Government would have to appropriate $100,000,000 to maintain this fund. Gentle- men if you take the actuaries' report, the very first paragraph of it states that their report is based upon theory and theory only. If I am not correct I ask any gentle- man to correct me. In other words, they said they had not had sufficient time to get the workings of the measure as an actuality. It is based probably upon just such figures as the life insurance companies, and yet it is diametrically opposed to the principle of life insurance. It is an annuity created by us, gentlemen. Let me make this impression, if no other, on your mmds. We are not a horde of Government employees coming and asking you for something m the way of chanty. We have worked for what we ask you for, for lo these many years; and, as has been said we have been faithful in war and in peace. We have come here and said, "Gentlemen we have collected a sum of money; here it is; we are probably not able to take care of the running of the affair ourselves and we ask the United States Gov- ernment in its greatness and generosity to take this sum of money and hold it for us, and if it becomes necessary, meet us with a like sum to see that our old men who have reached the age of wearing out, who have reached the age of nonproductiveness, are retired on something. If it is no more than half a loaf or one-fourth a loaf it will be better than nothing, and we have formed the nucleus ourselves and we ask the United States Government to meet us, if necessary, halfway. " 22 INCBEASE OF ANNUITIES UNDER BETIEEMBNT LAW. My friend Black, from New York, has just told you that the New York Navy Yard has gone on record as being in favor of, if neceaary, doubling this 2.50 to 5 per cent to increase this fund. I do not back that idea. We had our meeting of the navy-yard employees, postal employees, etc., and that very question was put forward by my- self, and they said no. Especially the postal employees said no; they don't think so. One of the reasons advanced at that time was exactly what has been brought out here this morning, that there are men drawing $4,000 a year, assistant postmasters, for instance, who are eligible under this original bill. He says, "I am paying 2^ per cent and here are men making a thousand dollars a year and they only pay 2^ per cent. I can only get $1,200 under the law and they can get,$l,200 under the law. I don't think it is equitable and just." Neither do I. But it was the best that could be brought at the time the bill was gotten up, and we are satisfied on that. We believe in the course of time all these inequalities will be met by Congress, and that is the faith we have in you gentlemen. You are the servants of the people, and we are all the servants of one another, and we believe you want to be fair in your disposition toward us, and we want to be fair with you, but we want you to under- stand thoroughly we don't come to you begging you as a matter of charity. The military forces are pensioned. The gentleman made a statement that the Standard Oil Co. and other corporations pensioned their servants after they become super- annuated for service. That is a pension. The Government pensions its sol(fiers and sailors, and we pay it at the rate of two hundred and fifty to three hundred millions a year, and no loyal citizen complains of that. We have been just as faithful to our Government in times of peace and in times of war, as I said awhile ago, as they have been, and we come to you gentlemen and say we have created the nucleus of a fiind here and we want you to take it and if necessary- meet us half way. We do not believe that after 25 years, actuary or no actuary, you will have to appropriate $100,000,000 to take care of us. We do not contemplate such a thing. But, after all, gentlemen, would it not be doing a just thing, would it not be taking the people's money to pay the people for services rendered in the years of their best life and manhood? So I say, gentlemen, I hope you will consider this bill and so far as we at the Norfolk Navy Yard and the Postal Service are concerned we know no other bill, and I am here as their representative to advocate this bill because we believe in all respects it is the most equitable. In the first place section 1 increases the annuity. I know some people will complain because they do not understand it. Biit when you take this basis of $12 plus 1 per cent of the average pay for the last 10 years all are treated alike; no matter how much money they are drawing or paying, it is just the same. Then you multiply by the number of years of service and we have it just exactly the same. When we come here to section 3, the section which gives the man the right to apply, it does not say he shall go out, but he has the right to apply after 30 years of service, and if he does apply you provide in the bill that 3 per cent per annum for every year less than 60 years shall be deducted from the amount of the annuity. That is just as equitable. We believe that. We see no reason why it should not be. ' Then the best of all provisions in it is the fourth that takes the old man up. I could cite several cases — I will cite one of a man who met me on the street and said, "What am I going to do now? I am 62 years old ; I have worked 30 years in the navy yard faithfully." I knew it was true because I knew the man. He says, "I am discharged. I have no recourse than to go out and starve to dftath. I have a family of five to support. " He says, "What am I going to do?" I said, "I do not know, Hughes; there are other men int the same shape coming to me daily and asking me what are they going to do, where can they get help. " Gentlemen, those are the men you talk about when they reach the retirement age, and if there is any idea that has been brought out better than that idea I do not know what it is. Mr. Chairman, I thank you very much for giving me the opportunity of saying these few words, and I hope it will be considered from the standpoint of what Mr. Fairfield said in his opening addreess — the standpoint of humanity. If we all had a little more of the milk of human kindness in us and believed the other fellow just as good and honest as we are and were willing to meet him half way there would not be nearly the trouble there is in the world to-day. I thank you, gentlemen. Mr. Alcorn. Congressman Tague of Massachusetts is present, and we would like him to say a few words. INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 23 STATEMENT OF HON. PETER F. TAGUE, A BEPBESENTATIVE IN CONGRESS OF THE TENTH MASSACHUSETTS DISTRICT. Mr. Tagtje. Gentlemen of the committee, I had no intention of getting into this question at all. I just oame in to listen. From what I do know of this legislation I am very much in favor of the passage of this bill, I have seen th,e hardship worked out under the present law without any intent on the part of Congress of having that hardship exist. The district I have the honor to represent is the district in which is located the Boston Navy Yard. I have had not one but dozens and dozens of cases brought to my attention of men who have worked in the navy yard for 25 or 30 or 35 years and because of lack of work and no money they have been thrown out of employment. I had a case only a few days ago of a man who is now within three months of the time when he could draw a pension from the Government; he has been in the department for 38 years and served in th« several wars for the Government, -ivas honored, and he is thrown out on the highway and can not get employment. I do not believe the law was intended to do that. At least, that was not my intention, and I think, Mr. Chair- man, a,fter my talk with you, you feel as I do. You intended to help the men instead of punishing them. The Chairman. Let me ask you, was this man within three months of the retire- ment age separated under the alleged terms of the retirement law or for lack of work or lack of appropriation? Mr. Tague. He was let go because they claimed there was no appropriation and lack of money in the department. The Chairman. Of course, his separation was in no sense based on the retire- ment law. Mr. Tague. That claim, Mr. Chairman, could not be justified by any head of department, I do not care who he was. The Chairman. Certainly not. Mt. Tague. I took the matter up with the Assistant Secretary of the Navy and he can not make a fair explanation of why that man was being discharged when hundreds of men were being kept there who only have served their Government a few years in the yard and are kept there through favoritism. It is not the law itself but it is the way it is being ruled by some heads of departments who do not study it and who do not know the human side of the subject at all. I do not care to take the time of the committee, but I intend when the time comes to say something about it. As I said, I came in more to listen, but I am heartily in favor of some remedy at once for the men who have given their best years to the Government. I know one man who,- if he were permitted to stay in until next July, would get a pension, and only yesterday I asked, the Government to return him the money he had paid in on his pension, and that'man is walking the streets and can not get employment, after giving 38 years to the Government in the navy yard. As I understand the pension laws, the intention was that when a man had given faithful service to the Government and had become old and incapacitated the Govern- ment would give him assistance and would give him a reward for his services. That is what I believe these pension laws are, after all. And I hope, Mr. Chairman, your committee will see its way clear to amend the law and deal out justice to these faithful servants of the Government. The Chairman. Mr. Alcorn, have you other out-of-town people who wish to speak? Mr. Alcorn. I am not sure whether there are others from out of the city who would like to be heard or not. That is all at the present time, unless you want to hear those in the city. There are a great many here representing various branches of the service. The Chairman. We will shortly have to recess because the appropriation bill is before the House and that is a matter of importance, and most members of the com- mittee would like to be present. I was going to suggest that we sit Tuesday at 10 o'clock — Tuesday of next week. Mr. SwAZEY. Mr. Chairman, may I say a word? The Chairman. Will you state your full name? 24 INCREASE OF ANNUITIES UNDER RETIREMENT LAW, STATEICENT OF IlIB. THEODORE F. SWAZEY, CHAHIMAN OF THE EXECUTIVE COMMITTEE OF THE ASSOCIATION OF RETIRED FED- ERAL EMPLOYEES. Mr. SwAZEY. Mr. Chajrman, for myself I have nothing to say, but as chairman of the executive committee I would like to say on behalf of thp Association of Retired Federal Employees that we have perfect confidence in this committee. We believe that it will at the proper time report this bill with an increase; whether the increase we have asked or not I could not say. But this committee has all the information that we have as to our necessities. ' Man wants but little here below. Nor wants that little long. That fits us exactly. We want a little, but not very long, and we would like to have it p. d. q., because the committee knows that we are all past three-score years and ten. I only served the Government 51 years. I went in as a boy and I was better qualified when I was retired for the business- of the Government than 1 was when I went in^ much better. The men whom you see here to-day are simply the survival of the fittest. I have seen 100 if not 1,000 men in the Treasury Department who were strona, vigorous, rugged men. I have seen them lay down their lives for their country. The losses in ttft civil .service have been greater than they have been in the Army and the Navy on the line of battle, for the reason that our work has been in badly ventilated buildings, handling old papers, and breathing death-dealing germs, until men have gone off under age. I would much rather take my chances on the line of battle, where I have taken chances, than in the Government service. Now, we are grateful to this committee, Mr. Chairman. We are more than grateful; we are abundantly thankful for what you have done for us. You have given us the annuities that we have now, and that are helping us, and we believe that you are going to do the fair thing by us when the proper time comes when you have a chance to report this bill. We are not ungrateful; we are thankful that we have had the privilege of living these 70, 80, and 90 years, some of us, under the best Government that the world has ever seen, where every man is created free and equal, and if he has a mind to put forth the effort he can remain free and equal; where every man, except in the District 6f Columbia, enjoys all the rights and privileges of our Chief Justice. We, as an association, have given you all the information about our situation that we possess, and we are perfectly willing to leave it to you. When I stated here once that this Congress understood that we could not live on from $1,200 to $2,500, they added a $240 bonus to eke out our salaries of from $1,200 to $2,500 a year. I said, "You turned us out at $720 maximum and expected us to live on it." I think it was the chairman who corrected me and said, "We turned you out at that, but we did not expect you to live on it. We gave you every dollar that we could get. Had we reported that bill for more than $60 a month we believed the chances were that you could not get anything. We could not have passed a bill for more than $60 a month, and our object was to get that law on the statute books and later give you what we thought you were entitled to," which we gratefully accepted. We were thankful they did not put it for more than that or we would have been left without anything. Thank you Mr. Chairman. Mr. Fairfield. I might say to the members of the committee that other tables will be submitted, and also copies of the tables I have here to-day will be given to the members of the comniittee so you will have access to all the information.' The Chairman. These hearings will stand adjourned until Tuesday, February 21 . at 10 o'clock a. m. (Whereupon^ the committee adjourned until Tuesday, February 21, 1922, at 10 o'clock a. m.) Committee on Reform in the Civil Service, House of Representatives, February 21, 192^. The committee met at 10 o'clock a. m., Hon. Frederick R. Lehlbach (chairman) presiding. The Chairman. The committee will be in order. , ' This is a continuation of the hearing on the bill H. R. 10246, introduced by Mr. Fairfield, and other measures having in view the increase of annuities under the retire- INCBEASE 0}? ANNUITIES UNDER RETIREMENT LAW. 25 ment law and a shortening or a modification of the time when such annuities are to be enjoyed. Doctor Kindred, Representative in Congrese from the second district of New York, appeared and gave his indorsement to the proposition of increasing annuities under the retirement law and urged support of measures intended to put that into effect. There is present Mr. Deal, of Virginia, a Member of Congress, and we will hear him first. STATEMENT OF HON. JOSEPH T. DEAL, A REPRESENTATIVE IN CONGRESS FROM THE SECOND DISTRICT OF VIRGINIA. Mr. Deal. Mr. Chairman, some time since I introduced a bill for the benefit of the workmen in retiring after a certain time of service. Since that time Mr. Fairfield has introduced a bill which covers the points embodied in the bill which I introduced with some additions which are desired by those who will be benefited by the law, ' and I wish to say that H. R. 10246 is entirely satisfactory to me, and I would be glad to withdraw my bill and substitute in its place Mr. Fairfield's bill. No. 10246. The Chairman. The committee will be glad to take that action. Mr. Deal. I will not take any more of your time. I thank you. The Chairman. The committee thanks you for your presence. The chairman of the committee, at the suggestion of the proponents of this legisla- tion, addressed a letter to the head of each of the departments of the Government requesting their comments on this proposed legislation and inviting them to be present either personally or through a representative at the hearing to-day if they were so inclined, to express orally their views on the subject. I will accordingly ask whether there is present anyone representing the head of any of the departments of the Government? I think there is present, or there was present, the appointment clerk of the Post Office Department, who came to express tne views of the Acting Postmaster General. If he desires to be heard at the present time the committee will be glad to hear him. STATEMENT OF MR. ROBERT S. REGAR, APPOINTMENT CLERK, POST OFFICE DEPARTMENT. Mr. Regar. If it meets with the approval of the chairman of the committee, the Post Office Department will file a letter in a day or two, expressing its views on the proposition. The Chairman. That will be satisfactory. Is there any other representative of any of the departments of the Government present who desires to be heard? STATEMENT OF MR. GEORGE G. HOOVER. Mr. Hoover. Mr. Chairman, I do not represent the Pension Bureau, but I am here in my own individual capacity. I am section chief of the Bureau of Pensions. I have been In the employ of the Government since 1890. I am 68 years of age. In reading this bill in the Star last night it seemed to me that one section of the bill is based on the theory that a man of 55 or 60 years of age is incapable of performing his duty; that he began then to realize that he was in a decline. Now l' am here as a representative and as an example to show that that theory is based upon false premises. If you take the men over 60 off the Supreme Court bench, how many would be left? If you take out the men over 60 years of age in the Pension Bureau there would not be anyone left there. We have not enough now to do the work These young women when they come in are continually sick. There is one woman there 70 years old who has not been sick for 30 years, yet she would be put out ■ and replaced by some young one who would be continually sick. I thmk this idea of 60 years is wrong. Seventy is young enough, and besides, if you make it any longer than that you will not be able to get it through Congress. That was the objection that was raised to the legislation before. Now there is another provision to base the annuity upon the salary of the person at the time of the retirement. That is a false premise. When the Wilson administra- tion came into power, through political influence many men and women were put up from $1 200 or $1,400 to |2,000 and the Republicans stayed at $1,200 or $1,400. Now it would be unjust to grant a higher annuity to those who got their salaries through political influence and not to the others. They are all entitled to live when they get •out and they are all entitled to the same annuity. Length of service is all right so far as basing an annuity upon that. That is all right. But the salary is a very false premise upon which to base an annuity. 26 INCBEASE OF ANITDITIES UNDER BETIEBMENT LAW. Now, that is all I want to say here in an individual capacity. I do not represent anybody and do not belong to any organization. I am here simply as an American citizen holding the position I do of chief in the Bureau of Pensions. I am a better man than I was 10 years ago, because I am in a position where I can look up the dif- ferent laws, construe them and assist. I am a better man than I was 20 years ago. Mr. Fairfield. Will the gentleman answer a question? Mr. Hoover. Certainly. Mr. Fairfield. If you read the bill carefully you will see there is no provision that they shall retire at 60. But would you favor a bill that provided where a man felt he was breaking he would have the right to retire at 60? Mr. Hoover. Yes. Mr. Fairfield. That is all that is provided by this bill. Mr. Hoover. When this bill was up before I had a conversation with the chairman and I asked could they be reappointed. He said, "Yes, they could be reappointed two years at a time," and I said, "It will be a matter of favoritism as to those who are held and those who are not," and that was true. There were good men and women turned out of the Pension Office two years ago, while those not as efficient as they were kept in. I believe in having this optional right along, as long as a man or woman is capable of holding the position. Mr. Fairfield. You do not think there is an3rthing wrong with a bill that permits a man or woman to retire at the age of 60 if they feel their health is breaking? Mr. HoovBB. No; I do not. Mr. Fairfield. Or to go on, because they would have to go on or forfeit, up to 70? Do you think there is anything wrong with that? Mr. Hoover. No; but I do not want to be turned out at 70. I feel too young for that. I want to be reappointed as long as I am able to perform my duties. If you can let them be reappointed, that is all right, but do not make it compulsory at 70. Mr. Fairfield. That is already in the law. Mr. Hoover. Compulsory at 70? Mr. Fairfield. Yes. Mr. Hoover. With the privilege^ of being reappointed? Mr. Fairfield. Yes; for two years. Mr. Hoover. That is, suppose a man goes out at 60 or 65, how many times can he be reappointed, provided he is physically capable of performing his duties? I do not believe in driving good men out of the service and putting new ones in that it wiU take years to train. The 8£|,lary of a governmental employee is not a fa,ir standard of the value of his services or ability, because he or she may have attained a grade through political influence or personal favor and not through merit. To illustrate this point I will compare two clerks, one a Democrat and the other a Republican, in the bureau in the beginning of the Wilson Administration. Each one drew the same amount in salary, but in a short time the Democrat, being from Texas, was advanced through political influence, to $2,000 per annum and continued to draw that salary until a few months ago, when it was reduced to $1,800, making his average salary $1,900 per annum, while during the same period of time the Republican drew an average salary of $1,300 per annum. Now, assuming that at the expiration of 10 years from the beginning of the Wilson administration each has drawn the average salary as stated above and served the same number of years, it is clear that at the time of retirement the annuity of the Democrat would be $930 per annum, while that of the Republican would be $750. This simply illustrates the injustice which would follow in one case while there are himdreds who will be similarly affected by the computation of annuities upon a salary basis. Length of service is a material factor if from no other reason because the longer the- service the shorter the time during which the annuitant would live on account of being older. Let the annuity for a person in the clerical class at the age of 70 years with 30 or more years' service to his credit be $100 per month and retirement optional so long as the employee is physically and mentally competent to fully discharge the duties of the position. Do you wish to ask me any more questions? Mr. Fairfield. No. INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 27 STATEMENT OP HON. ADOLPH L. KLINE, A BEPBESENTATIVE IN CONGRESS FROM THE FIFTH NEW YORK DISTRICT. Mr. Kline. Mr. Chairman, I appear here advocating that men be permitted to retire after serving 15, 20, or 30 years, as the case may be, without any attention being given to the person's age. By that I mean this: A boy can go in the navy yard at 18 and serve 50 years and only be 68 years of age, or he can go in at 21 and serve 30 years and only be 51 years of age, but he has completed 30 years of service. He should be entitled to retirement. » I am speaking not only for myself and Congressman Hogan but, I might add, the entire delegation in Congress from Kings County, N. Y. The Chairman. In the absence of Mr. Alcorn, who is detained by sickness, I will request Doctor Reed, secretary of the Joint Conference on Retirement, to take charge. Doctor Reed. Mr. Chairman. Miss McNally, third vice president of the National Federation of Federal Employees, is desirous of taking an 11 o'clock train, and I will ask that she be heard first. The Chairman. The committee will be glad to hear her. STATEMENT OF MISS GERTRUDE M. McNALLY, THIRD VICE PRESI- DENT NATIONAL FEDERATION OF FEDERAL EMPLOYEES. Miss McNallt. Mr. Chairman, on behalf of the National Federation of Federal Employees, I want to register with the committee that our organization is in favor of the provisions of the Fairffeld bill. That bill follows out practically the resolution adopted on the subject of retirement at our last annual convention. I believe it is not necessary to go into anv arguments, because the committee has heard manv arguments whicH we support. We just want to record ourselves in favor of that particular bill which is before the committee for consideration. The Chairman. All right. Miss McNally. STATEMENT OF DR. C, EDER REED, SECRETARY FEDERAL EM- PLOYEES' UNION, No. 250, NATIONAL FEDERATION OF FEDERAL EMPLOYEES. Dr. Reed. IVlr. Chainnan, I am the secretary of the joint retirement committee of the Naval Gun Factory at Washington, D, C, and I am also secretary of the joint conference on retirement which represents the civil-service employees of the United States. I woiild like to make a short statement as secretary of the retirement committee of the Naval Gun Factory, and call on other representatives to speak for their own organizations. Mr. Chainnan and members of the committee, the ioint retirement committee of the Naval Gun Factory represents the employees of the Washington Navy Yard in all matters pertaining to civil-service retirement. This committee indorses in principle the Fairfield bill, H. R. 3024fi. It has been suggested, of course, that the comma in line 6 be omitted, and that lines 7 and 8 should be changed to read "of the average annual basic salary, pay, or ■compensation from the United States for the 10 years next preceding the date on which he or she shall retire, multiplied by the number of years of service: Provided. That in." It has been suggested that section 4 of the bill should be made effective as of May 22, 1920, and that provision should be made in behalf of those employees who would otherwise be entitled to apply for and receive annuities but who have withdrawn their contributions at the time of the passage of this amendment. It has been suggested that the return of these contributions with interest, to the retirement fund, would with propriety be made by cutting the annuities in half for as many months as would be necessary to absorb the amount. It has been suggested that the words ''through no delinquency on his part," in sec- tion 4, on page 2, lines 12 and 13 of the bill, should be omitted. As to this matter of delinquency, the section of the bill deals in most cases with that period in life where hardening of the arteries of the brain and changes in internal secretions of the body, render it altogether possible that apparent delinquencies are but the symptoms of beginning decay. It would be the height of the ridiculous to deprive a patient in a psycopathic ward of needed nourishment because he acted queerly. There is danger of grave injustice being done in many cases if a delinquency clause is inserted in this section. mo INCEEASE OF ANNUITIES UNDER KETIKEMENT LAW. The present unavoidable crisis in navy yard affairs impels the joint retirement com- mittee of the Naval Gun Factory to ask you to give sympathentic attention to the prin- ciples underlying the amendments proposed in the Fairfield bill, H. R. 10246. H As to the economic features of the-proposals, I should like to submit a statement prepared by Mr. McCoy, the Government actuary, during the consideration of the original Sterling-Lehlbach bill which was passed by the Congress and approved May 22, 1920. The fact brought out by this statement is that it is cheaper to retire these older employees in many cases than to permit them to continue at their work. The statement is here. « The Chairman. It will be inserted in the record. Estimated cost to the Government of not retiring clerks inefficient through m,ental or physical incapacity, based upon a total number of 300,000 employees. Estimated number of clerks who, chiefly through age, are inefficient. Annual salary of employees. Total cost of— , Average salary. Total . salary. Nonretire- ment. Retire- ment. 100 per cent inefficient 5,202 1,737 1,256 1900 1,000 1,200 $4,681,800 1,737,000 1,507,200 $4,681,800 1,302,750 753, 600 $3, 121, 200 1 042 200 75 percent inefficient.. . 50 per cent inefficient . 753 GOO Total'... 8,195 , 7,926,000 6,738,150 4,917,000 I That is, the Government is now paying annually some 8,195 employees 86,738,150 for work not per- formed by them, but actually performed by other employees; it would cost about $4,917,000 per year to retire these employees, a net saving by retirement of about $1,821,160. Doctor Reed. I said to the other representatives of the joint conference I would like them to speak for their organizations. I would like you next to hear Mr. M. A. Boden- hamer, representing Typographical Union No. 101. STATEMENT OF MB. M. A. BODENHAMEB, PBESIBENT, TYPOGBAPHICAIi UNION NO. 101. COLUMBIA Mr. BoDENHAMER. Mr. Chairman, representing the! typographical union of this city, the union being a member of the joint conference on retirement, we want to state that we unequivocally indorse the action of the conference in presenting the bill that Mr. Fairfield has introduced in Congress and which is now before the committee. The typographical union indorses the bill in all its provisions, because we feel that its provisions, while not all that might be desired, are all that we can reasonably expect at this time in the way of perfecting the bill. When the original bill was passed the conference did not think it was a perfect bill; neither do we think it is a perfect bill now or that it will be made perfect in the immediate future; but we think as time goes on and the imperfections appear, with the assistance of our good friends on this committee and other Members of Congress, there will eventually be evolved a bill that will meet all the requirements of the service. Mr. Chairman, the board of actuaries has made a report along certain lines. They have made, among other things, reports that we are not willing to concede are borne out by the experiences of other organizations that have retirement systems. For instance, that after a period of years a great expense will devolve upon the Government. The experience of the International Typographical Union is the opposite of that prophesied by the board of actuaries. For something over 12 years there has been a retirement system in the International Typographical Union— and I will state at this point that a question arose the other day at the hearing before the committee as to a man immediately going on to that pension roll at the age provided, if that is the law. The typographical union plan pensions its members immediately upon their becoming 60 years of age, provided they can not find sustaining employment, no matter whether they have put anything into the fund at that time or not. Of course, in the beginning they had not paid anything into the fund, but they went on the roll, nevertheless, at 60, and it is right and proper they should go on the retirement roll of the Government at the age provided by law whether they have contributed to the fund or not. INCEEASE OF ANNUITIES UNDER EETIKEMENT LAW. 29 The International Typographical Union plan originally contemplated the payment of $4 a week to its old age members. The fund was provided by an assessment of one-half of 1 per cent per month on the earnings of its members. Since that time the pension has been increased to $8 a week just exactly 100 per cent. The assessment for maintenance has not been increased at all, and the principal fund from which the payments are made has increased from about $300,000 to nearly a million and a half. The total amount that is paid out and the number of pensioners has increased materi- ally, numbering now about 1,800, but that one-half of 1 per cent in that 12 years pays a 100 per cent increase in the amount of the pension and is leaving a surplus every month. The Chairman. Let me ask you, are these contributions withdrawable? Mr. BODENHAMER. Oh, no. The Chairman. Of course, you know the scheme in the retirement law provides for the \vithdrawal of the contribution with compound interest upon separation from the service, whenever a person does not get an annuity. Mr. Bodenhamer. That is not the case in the International Typographical Union. If a member drops out he loses what he has paid in. But the losses in this manner are immaterial. We lose but few members m that way. Take this Federal retire- ment law, and we appreciate there is a big difference between the two, but the point I wanted to make was that there is hardly a possibility of a tremendous difference between what the employee contributes and what the Government should contribute even after a period of 25 years, as suggested by the Board of Actuaries, either by a return or an annuity as has been suggested. Of course a man would have to pay a great deal of money into the retirement fund before he had anything coming back to him in case of his death. Take a man who has been on the roll since the 22d of August, 1920, and who died at this time; he would not have more than a, month or two pension coming back to him out of the fund he has paid in, because he would not have contributed so much. But the m ain point I wanted to make was that there is hardly a reasonable possibility of the Government having to contribute more than the employees have been con- tributing to this fund if the provisions of the Fairfield bill are enacted into law. The speaker who preceded me exhorted on the fact that it was not fair that the salary of a person should be considered as compared to the annuity that he should receive. Just what grounds he has iqr his line of reasoning is hard to imagine. When the proposition is for a man paying a contribution based on |3,000 a year and never being able to participate to a greater extent than in a maximum salary of $1,200 a year, where the reason or the justice of it comes in I can not figure. A man who is continually contributing on an earning of .$3,000 never at any stage of the game being permitted to participate in a salary of more than $1,200, and having but two-fifths for him as against thi'ee-fifths agains't him, the justice of it is hard to imagine. The provisions of this bill would correct that injustice; that is, correct it up to a reasonable sum — not entirely. It would not permit him to participate in an annuity to the extent of $3,000, but it would permit him to participate in an annuity up to $1,200 if he had labored long enough to earn that annuity. A man who has worked for the Government for 40 years and has contributed any material amount of money all that length of time is certainly, according to all the rules of justice and equity, entitled to participate in a greater maximum than one who has in all that time only earned $1,200 and contributed in the same proportion . The present law bases the annuity on cycles of three years, and the amendment proposed in Mr. Fairfield's bill would correct that; and it should be corrected. You take the proposition of a man who has worked, for instance, 23^ years being retired without the option or opportunity of continuing for 6 months longer, when he would be permitted to retire under the 24-year cycle, he would naturally go back to the 21-year cycle thereby losing 2i years of the 3-year period . We do not think that is fair or equita- ble 'We feel he should be permitted to participate for every year of service he has given the Government. The Fairfield bill would permit that, and we feel it would be nothing but justice. . , ,. j • ^-i. x,^ i. To show that a retirement system is believed m or thought necessary by more organizations than one, I want to call attention to the retirement features of one of the greatest newspapers in the country, that of the Evening Star, of this city. They have a retirement system, entirely free on the part of the management, without any cost to the employees of the paper, that provides without regard to anything except a man's service that after that man has reached 60 years of age he can be retired on the same principle that is laid down in the Fairfield bill, that of the number of years of service Two per cent of his average pay for the last 10 years multiplied by the niunber of years in the service, etc., with a maximum annuity of 50 per cent of his average earnings for the last 10 years, and that maximum runs up as high as $5,000; that is, the annuity can not exceed $5,000 a year. 30 INCEEASE OF ANNUITIES UNDER RETIREMENT LAW. They have found that, regardless of a man's age, it might be for the best interests of the paper that he should be retired at 55, it might be for the best interests of the;paper that he be retired at 50, and if he has put in 20 years or 30 years of service, he is given credit for all those years in the computation of the annuity he shall receive. They have undoubtedly found it good business. As a man becomes naturally more un- productive as the years advance, it is good business for the paper to pay him 40 or 50 per cent of what he has been receiving, and better than to pay him 100 per cent for his lessened productive efficiency. They even go further, and the disability features they provide are very much better than the Government's disability features in the retirement law. They also have the sick benefit features, etc., and have a death benefit in connection with it that provides that a man shall receive as high as $3,000, based on service entirely. If he has been there 20 years, his family is entitled to a benefit of 13,000 at his death, something that the Fairfield or other bills do not provide for. Mr. Fairfield. Do I understand the contributions to take care of that are made wholly by the employees? Mr. BoDBNHAMBR. The employee makes no contribution whatever; it is entirely a gratuity on the part of the newspaper itself. Mr. London. That is, it being private employment, it really means that the private employer in order to keep their employees in a contented frame of mind provides something for the future? Mr. BoDENHAMEB. The truth of the matter is, of course, that the employer thinks it good business, whatever his motives may be; and if the private employer finds it to be good business, I do not see any reason why it would not be good business for the Government to proceed along the same lines. There is much to commend section 4 of Mr. Fairfield's bill, H. R. 10246, Mr. Chair- man and members of the committee. Its provisions would go far to make for the contentment and efficiency of the employees of the Government. Under the act as at present operative an employee may devote many years to the service of the Government — 30 years, or even 45 years — and yet not have reached the age of retire- ment as provided by the law, and should it so happen that to reduce the force or for other equally justifiable reasons this employee of these employees are separated from the service, they are left with nothing except a refund of such deductions as they have made to the fund as a reward for their faithful service. Certainly this does not seem just or fair. This condition is brought forcibly home to us at this time by the situation developed at the Washington Navy Yard, where more than a thou- sand workers have been dropped recently, some of them with service as great as 40 years or more, and many of them with service of from 25 to 40 years, and some with only a year or two or even with only a few months to go to reach the retirement status. Yet there is no relief for them under- the present law and all their service is lost unless they should be reemployed, which probability is extremely remote. The adoption of section 4 of H. R. 10246 would correct this inequity of the present law. I think that is all we have to say. Doctor Rebd. Congressman Rossdale is here. The Chairman. Congressman Rossdale was heard last week. Do you care to be heard again? Mr. Rossdale. I just came over this morining to be quiet and peaceable and listen to what the others have to say. This will not be the last meeting, will it? The Chairman. It depends on whether we can hear all those who wish to be heard to-day. If we can hear them al]„ I do not know whether there will be a further hear- ing or not. That will develop as we hear from those here. Mr. Rossdale. I would rather give way to the representatives of these various organizations. Doctor Reed. Mr. Hyatt, of the National Federation of Post Office Clerks, is here. STATEIlIENT OF MB. GILBERT E. HYATT, PRESIDENT NATIONAL FEDERATION OF POST OFFICE CLERKS. Mr. Hyatt. Mr. Chairman, the members of the National Federation of Post Office Clerks are particularly desirous of having the present retirement law amended in two respects— they want more liberal annuities and they want the opportunity to retire at an earlier age. The present annuities are not sufficiently attractive to induce those eligible for retirement to leave the service upon reaching retirement age. We have found in the Postal Service that aged employees shrink from retirement. They prefer to remain in the service. There is constant pressure from these eligible employees to be per- mitted to exercise their option to continue at work. In a measure this defeats the purpose of the retirement legislation. The corrective is found, in my opinion, by INCBEASE OF ANNUITIES UNDER BEXIREMENT LAW. 31 'making the annuities more liberal so that the eligible employees will cheerfully accept retirement benefits at the first opportunity. The Fairfield bills seeks to amend section 2 of the retirement act fixing the annui- ties on a more liberal plan. At present the maximum annuity is $720. Most post- office clerks upon retirement are entitled to this maximum annuity. Under the Fairfield bill a clerk who entered the service at 25 years would be entitled to retire at 65 years on an annuity of $1,200, assuming that the present rate of compensation ($1,800) remains in effect. Under section 2 of the Fairfield bill employees would be permitted to retire at 60 years of age. Of course the annuities in all such cases would be curtailed. For instance, the post-office clerk, above referred to, who wanted to retire at 60 years of ^ge could do so on an annuity of $1,050— or $30 for each year of service. Section 3 of the Fairfield bill permits of retirement at an earlier age than 60 on an annuity diminished at the rate of 3 per cent for each year under 60. Using the illus- tration of the post-office clerk who entered at 25 years of age, he could retire at the age of 55 years on an annuity of $892. .50, 15 per cent less than his 60-year annuity ($1,050), diminished at the rate of 3 per cent for each year under 60. It is specifically pro- vided that this section does not affect the existing law covering disability retirement. Section 4 of the Fairfield bill is designed primarily to meet the situation now con- fronting the navy yard employees. Under its provisions employees who have served the Government 15 years shall be entitled to participate in the benefits of the retire- ment act upon reaching the age of 60, providing he leaves his contributions in the retirement fund. It is but just that when the Government reduces its working force or when employees are involuntarily separated from the service they should be per- mitted to subsequently participate in the benefits of the retirement act. It is earnestly urged that the committee take prompt steps to amend the retirement act in the manner indicated by the Fairfield bill. Many of the present annuitants are in distress because of the inadequacy of the benefits. Many potential annuitants, whose retirement would benefit the service from an efficiency standpoint are remain- ing in the service. No one thought when the law was first enacted that it was the final word on retirement legislation. Amendments were expected. We have pointed out some of the most urgent correctives and request the committee to act favorably upon them. There is no material conflict between the Rossdale bill and the Fairfield bill. The latter is more comprehensive. Both bills would permit of retirement at an earlier age than at present. There is much agitation for this desirable change and its eventual acceptance by the Congress is certain. Mr. RossDALE. Mr. Chairman, I would like you to hear Mr. Grogan, representing another association of post-office clerks. STATElSilENT OF MR. JOHN J. GROG AN, SECRETABY OF THE UNITED NATIONAL ASSOCIATION OF POST OFFICE CLERKS. Mr. Grogan. Mr. Chairman, our association has given some study to the various bills which have been introduced by the Congressmen, and while we are in favor of some provisions of the different bills, yet we can not say that we fully indorse any particular bill. Of course, the subject is more or less problematical. It must be studied out, and there is a whole lot to be decided upon that would be equitable both to the Government and to the employees, and I think if we sum up just about what we have to say, or, rather, what the opinion of our members is, it should be done in a brief, and we will present this brief to the chairman of the committee later. ■ The Chairman. All right. „ , .... Dr. Reed. Mr. Chairman, I would like Mr. Huttle, representing the American National Association of Supervisors, to speak. STATEMENT OF MB. WILLIAM M. HUTTLE, NATIONAL PRESIDENT OF AMERICAN NATIONAL ASSOCIATION OF SUPERVISORS. Mr Huttle Mr Chairman, I would like to sav in behalf of my organization that we' fuilv indorse the Fairfield bill, H. R. 10246, particularly sections 1 and 4 of that bill. We feel in view of the argument presented here, that those employees who receive a larger salary than the maximum on which the annuities are based of $1,200 should receive larger annuities. . ...... , , ,, I believe the point was brought out here this mormng relative to the return of the contributions. It has also been suggested before the committee that some of the employees would favor a larger contribution on the part of the employees. I beheve 97037—22—5 32 INCBEASE OF ANHUITIBS UNDER EEHKEMENT LAW. before the committee will take up a lare;er contribution on the part of the employees they should take up the question of eliminating perhaps the return of the contribu- tions or even a reduction in the return of contributions instead of increasing the dontributions. And I do not believe that should be done unless the Goveriunent would equal at least what the employee contributes to the fund. I believe that covers about all I could say on the proposition, but I will say that we unreservedly indorse the principle of the Fairfield bill and would like the com- mittee to favor it. Mr. London. "What is the work of a supervisor? _ , Mr. HuTTLE. We are mechanical supervisors of work in the navy yards, partic- ularly. Mr. London. Sort of a superintendent? Mr. HuTTLB. Foremen. Dr. Reed. Mr. Chairman, Mr. Wallace, of the American Federation of Labor, is here. STATEMENT OF MR. EDGAR WALLACE, REPRESENTING THE AMERICAN FEDERATION OF LABOR. Mr. Wallace. Mr. Chairman and gentlemen of the committee, the American Fed- eration of Ijabor wishes to place its indorsement upon the principles of this bill, recog- nizing the necessity of giving them the opportunity to retire. The details of the measure we leave to the men who are directly affected . The purposes of the bill we heartily indorse. We feel that men at 60 years of age should at least have an opportunity to retire. We feel that some men are discharged ostensibly for delinquency when as a matter of fact the truth is that they are beginning to fail because of long service and old age. We do not believe it is fair that men should be put out of employment and deprived of that which they have been working toward for years because they begin to fail at an old age. I believe, gentlemen, that is all. Mr. Smith. Will you please amplify your argument in favor of retiring able-bodied men at 60 years of age? Mr. Wallace. At thp option of the men. We believe that men 60 years of age who are able would not ask to be retired, but that many men, especially those working in machine shops, and, yes, even clerks who have to keep track of a lot of details, at 60 years of age are beginning to fail, and I believe in the interest of the Government and in the interest of the service, and especially in the interest of the men for whom we are speaking, that they should at least have the option at 60 years of age after a suffi- cient term of service of retiring. Mr. Smith. Is it not true that men even in the mechanical line of activity are better fit to perform the service at 60 years of age than at 50 years of age? Mr. Wallace, That is true, but it is my opinion those men would resent being forced to retire at that age, and I believe the percentage of those who would ask to retire who were fit to Work would be so small it would not materially affect the expense. Doctor Reed. Mr. Chairman, I would like you to hear Mr. Coleman, of the Washing- ton Central Labor Union. STATEMENT OF MR. FRANK J. COLEMAN, CHAIRMAN LEGISLA- TIVE COMMITTEE WASHINGTON CENTRAL LABOR UNION. Mr. Coleman. Mr. Chairman, I am chairman of the legislative committee of the Washington Central Labor Union and represent particularly all the employees who are affiliated with the Washington Central Labor Union, and the Washington Central Labor Union heartily indorses the Fairfield bill, having been through the bill, many of our delegates being associated with the retirement association, and we would like to go on record as being heartily in favor of the Farifield bill. I would just like to give that indorsement. Mr. RossDALE. Mr. Chairman, Congressman Petersen, from Brooklyn, is standing here very quietly, and I believe he wants to be noted in the record. INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 33 STATEMENT OF HON. ANDREW N. PETERSEN, A REPRESENTATIVE IN CONGRESS FROM THE NINTH DISTRICT OF NEW YORK. Mr. Petersen. Mr. Chairman, I am not going into any arguments on the bill, but I would like to say this, that I know of seven Eepublican Congressmen from Brooklyn who are in favor dt this laill, and I believe the only Democratic member is in favor of it. We would like to see it reported out quickly, and we would like to have action on it. Doctor Reed. I would like you to hear Mr. Bernard G. Ladd, ot the Washington Navy Yard, representing the machinists. STATEMENT OF MR. BERNARD G. LADD, REPRESENTING THE MA- CHINISTS OP THE WASHINGTON NAVY YARD. Mr. Ladd. Mr. Chairman, I would like to indorse the bill heartily for the local machinists organization of this city, who have indorsed it, and we think it is the most worthy measure, particularly at this time, in our trade. We have some men with us this morning who have put in 44 years' service who are now out on furlough and will in all probability be discharged, and they are lacking two years of reaching the period of retirement. Some of those men were in bad liealth, and consequently their efficiency was lowered and they have been laid off. Mr. Smith. Would section 4 of the Fairfield bill take care of them? Mr. Ladd. Yes, sir. In addition to that, I would like to file a clipping from last night's Star that indorses my sentiments and my organization's sentiments on the Fairfield bill. 'The Chaikman. All right, it will be incorporated in the record. Retirement Law to be Considered — Committee on Reform in Civil Service TO Hear Amendments To-morrow — Ask Important Changes — Underlying Principles ov Fairfield Bill are Indorsed by Joint Conference. The Committee on Reform in the Civil Service of the House will continue at 10 o'clock to-morrow morning the hearings on the proposed amendments to the civil serv- ice retirement law. Local representatives af employees ' organizations and individuals will be heard. The joint conference on retirement, of which R. H. Alcorn is chairman, is indorsing the underlying principles of the Fairfield bill, the chief object of which is declared by the conference " to permit the giving of bare justice to employees of the Govern- ment." statement issued. In a statement issued to-day the conference declared, in part: "The scheme of annuities in the retirement act of May 22, 1920, fails to meet the necessities and the equities of the economic problem. The low-salaried, and shorter- service employee complains, through dire necessity, that he can not exist on the annu- ity granted, while the high-salaried employee complains, through a sense of financial justice, that his contributions are all out of proportion to the amount of annuity insur- ance he receives. The plan proposed in section 1 of the Fairfield bill makes the $1,200 employee the pivot of transition from the present plan to the proposed plan. It gives a generously larger annuity to the low-salaried or snort-ser,vice employees and a reason- ably larger annuity to the higher-salaried or longer-service employee. optional retirement urged. " Section 2 of the bill recognizes the fact that 60 years of age is the period when the bodily and :mental vigor of many men and women has begun to fail, and that while they colild not prove total disability, their own intuitions warn them that they should ease up or they will break on the job. Optional retirement at 60 would spare them an unnecessary collapse of their physical powers. This section at the same time recog- nizes the fact that many men and women are still vigorous and able to do their accus- tomed work at 60 years of age, hence the lack of legal compulsion to retire at that age permits them to continue on until reaching the time when the law requires them to secure a certificate of proficiency before being permitted to serve two or four years longer. Section 2 would also allow many of those who are being separated from the service in the present readjustment of the Government's business to be placed on the retired list as their long service deserves. "The actuaries have not yet calculated the cost of reducing all retirement ages to 60 years but when it is considered that probably only a small percentage of those reach- 84 INCBEASE OF ANNUITIES UNDER KETIEEMENT LAW. ing 60 will elect to retire, the actual cost will not be as great as the total estimated possible boat. " Section 3 recognizes the fact that while it has been necessary in the readjustment of the Governinent's business since the retirement act for many employees to be sep- arated summarily from the service or frightened out on account of pending reductions, their many years of service entitle them to consideration and they are permitted to apply for annuitjr from the retirement fund at a reduced rate on account of their younger age. This section wbuld be especially helpful to those employees between 55 and 60 years of age who have not been able to obtain profitable reemployment in the keen competition with younger men in the business world. The provisions of this section as written will probably have to be considerably modified to meet the re- quirements of the actuskriies for the safeguarding of the retirement fund against expen- sive retirements at early ages, but the underlying principle should by all means have due consideration. "Section 4 of the Fairfield bill appeals strongly to the employees who are being let out of the service and who see their chance for an annuity gone. If they can know that by leaving their contributions safe with the Government in the retirement fund they will receive the annuities earned by their many years of service when they finally reach 60 jrears of age, they can go out into private life with much less concern and worry than if they felt that they should have nothing in their old age. This section should not add greatly to the cost of the retirement act. "It is hoped that the hearings now in progress will convince the Committee on Reform in the Civil Service of the necessity of asking the House of Representatives to take early action for the relief of employees of long service, who can not be retained in Government employment." Doctor Reed. Mr. Chairman, those are all of the organization representatives whom I recognize here this morning that have not been heard, so I would leave it up to you to suggest the next move, sir. The Chairman. Doctor Reed, as the spokesman for the joint conference on retire- ment here this morning, I want to ask you this: It is my impression that the joint conference stated at the previous hearing that they would be prepared to furnish to the committee tables of estimates or figures, in whatever form they desired, that would give the committee an idea of the cost of the provisions of the Fail-field bill. Doctor Reed. The conference has that matter under advisement and is making plans toward it, but they have not yet been completed. The Chairman. I just wanted to know whether you had that in mind. Doctor Reed. Yes, sir. Mr. Fairfield. Mr. Chairman, I have before me tables that have been submitted by the actuary, together with a statement by him giving specific information, which I would like to have incorporated as a part of the hearings. Mr. London. Which actuary? Mr. Fairfield. Joseph F. McCoy. Mr. London. Government actuary? Mr. Fairfield. Government actuary; yes, sir. The Chairman. That will be incorporated. February 17, 1922. Table A shows, under the proposed plan, the salary corresponding to the stated annuity. , For example, an annuity of $600 corresponds to an annual salary of $1,800 with a 20-year service, $1,200 with a 25-year service, $800 with a 30-year service and only $133 with a service of 45 years. ' Table B shows the monthly payment for a specified term of years that will amount at retirement to the value of the specified annuities at that time. For example the value of an annuity of $600 at retirement at 70 years of age, from the mortality tables shown in the report of the board of actuaries, is $4,343. A monthly payment of $11.84 for 20 years will amount, interest at 4 per cent, to this sum, a monthly payment of $8.45 for 25 years, a monthly payment of $6.26 for 30 years, a monthly payment of $4.75 for 35 years, a monthly payment of $3.67 for 40 years, or a monthly payment of $2.88 for 45 years. That is, for an employee that has received $1,800 for 20 years the necessary monthly contribution must be 7.89 per cent of his monthly pay Re- ceiving an annual salary of $1,800 for 25 years, such percentage must be 7.04 per cent Receiving $1,800 for 30 years, such percentage must be 6.26 per cent. For 40 years the percentage must be 4.90 per cent. For 45 years, the percentage must be 3 84 per cent. Jos. S. McCoy. INCREASE OF ANNXJITIBS UNDEE RETIREMENT LAW. 35 Table A. — Salary equivalent to certain annuities. Annuity. 15 years' service. 20 years' service. 25 years' service. 30 years' service. 35 years' service. 40 years' service. 45 years' service. $300. $350. $400. $450. <5D0. $950. $600. $650. $700. $750. 1800. $800 1,133 1,467 1,800 2,133 3,667 2,800 4,333 4,667 5,000 $950. . . $1,000.. $1,050.. $1,100.. $1,150.. $1,200.. $300 550 800 1,050 1,300 1,550 1,800 2,050 2,300 2,550 2,800 3,050 3,300 3,550 3,800 4,050 4,300 4,550 ■4,800 $200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 '3,600 $133 300 467 633 800 967 1,133 1,300 1,467 1,633 1,800 1,967 2,133 2,300 2,467 2,633 12,800 $86 229 371 514 657 800 943 1,086 1,229 1,371 1,514 1,657 1,800 1,943 2,086 12,229 $50 175 300 425 550 675 800 925 1,060 1,175 1,300 1,425 1,550 1,675 1 1, 800 $22 133 244 356 467 678 689 800 911 1,022 1,133 1,244 1,356 11,467 1 And higher. Table B. — Monthly payment that will amount to stated annuities, for different lengths of service. Annuity. 15 years. 20 years. 25 years. 30 years. 70 years. 65 years. 70 years. 65 years. 70 years. 65 years. 70 years. 65 years. $300 $8,825 10. 296 11.766 a3.237 14.708 16. 179 17.650 19.120 20.592 22.062 23.533 25.004 26. 474 27.945 29. 416 30.887 32.358 33.828 35.299 $10. 559 12.319 14.079 15.839 17. 599 19.359 21. 119 22.879 24. 639 26.398 28. 158 29. 918 31.678 32.438 35. 198 36.958 38. 718 40.478 42.238 $5,922 6.909 7.896 8.883 9.870 10. 857 11.844 12.831 13. 818 14. 805 15. 792 16. 779 17. 766 18.753 19. 740 20.727 21.714 22. 701 23.688 $7,086 8.267 9.448 10.629 11. 810 12.991 14. 172 15.353 16.534 17. 715 18. 896 20.077 21. 258 22.439 23.620 24.801 25. 982 27. 163 28.344 $4.\224 4.928 5.632 6.336 7.040 7.744 8.448 9.152 9.856 10.560 11.264 11. 968 12. 672 13.376 14.080 14.784 15.488 16. 192 16.896 $5,049 6.890 6.732 7.573 8.415 9.256 10. 098 10.939 11.781 12. 622 13.464 14.305 15. 147 15.988 16.830 17.671 18.513 19.354 20.196 $3,129 3.650 4.172 4.693 5.215 5.736 6.258 6.779 7.301 7.822 8.344 8.865 9.387 9.908 10. 430 10.951 11.473 11.994 12. 516 $3,744 $350 4.368 $400 4.992 $460 6.616 $500 6.240 $550 . . 6.864 $600 7.488 $650 .... 8.112 $700 8.736 $750 9.360 $800 9.984 $850 10.608 $900 11.232 $950 11.856 $1,000 12.480 $1,050 13.104 $1,100 13.728 $1,150..., $1,200 14. 352 14.976 ity. 35 y cars. 40 y ears. 45 y sars. 70 years. 65 years. 70 years. 65 years. 70 years. 65 years. J300 12.376 2.772 3.168 3.564 3.960 4.356 4.752 5.148 5.544 6.940 6.336 6.732 7.128 7.524 7.920 8.316 8.712 9.108 9.504 $2,844 3.318 3.792 4.266 4.740 5.214 5.688 6.162 6.636 7.110 7.584 8.058 8.532 9.006 9.480 9.954 10.428 10.90Z 11.376 $1,836 2.142 2.448 2.754 3.060 3.366 3.672 3.978 4.284 4.590 4.896 5.202 5.508 5.814 6.120 6.426 6.732 7.038 7.344 $2,196 2.562 2.928 3.294 3.660 4.026 4.392 4.758 5.124 5.490 6.856 6.220 6.588 6.954 7.320 7.686 8.052 8.418 8.784 $1,440 1.680 1.920 2.160 2.400 2.640 2.880 3.120 3.360 3.600 3.840 4.080 4.320 4.560 4.800 5.040 5.280 5.520 5.760 $1,722 2.0O9 J400 2.296 2.583 ewiO 2.870 3.157 JQQQ 3.444 3.731 J700 4.018 4.305 conn 4.592 4.879 cqnn 5.166 5.453 •1 nnn 5.740 6.027 41 'inn' 6.314 6.601 6.889 36 INCREASE OE ANNUITIES 'nNDER BETIKEMBNT LAW. Value of annuities beginning at age given in table. Annuity. Age. Annuity. Age. 70 years. 65 ye^rs. 70 years. 65 years. S300 $2, 172 2,534 2,896 3,258 3,620 3,981 4,343 4,705 5,067 5,429 5,791 6,153 6,615 6,877 7,239 7,601 7,963 8,326 8,687 2,280 $2,599 3,032 3,466 2,898 4,331 4,764 6,197 6,630 6,063 6,497 6,930 7,363 7,796 8,229 8,662 9,096 9,528 9,961 10,394 2,729 $330 $2,389 2,606 3,040 3,185 3,475 3,800 3,909 4,170 4,561 4,778 4,886 5,212 5,321 ,6' 081 6,370 6,949 7,529 7,818 $2,858 S350 $360 3,118 $400 $420 3,638 t450 . . . $440 3,811 S500 $480 4,158 1550 $525 4,548 $600 $540 4,677 $650 $576 5,049 1700 $630 6,457 $760 $660 5,717 $800 $675 6,847 $850 ... $720 6,237 6,367 $900 . . $735 $950 $770 6,670 $1,000 $840 ... . . 7,276 $1 050 $880 7,623 8,316 $1 100 $960 $1 150 $1,040 9,008 $1200 $1,080 9,355 $315 Dr. Reed. Mr. Chairman, there is a gentleman here who has come from one of the Government plants that is actually shutdown, Charleston, W. Va., Mr. Klein. I think it would be good to hear his experience. The Chairman. Yes; we would be glad to hear him. STATEMENT OF MR. C. STANLEY KLEIN, ASSISTANT INSPECTOB, OF ORDNANCE, UNITED STATES NAVY. Mr. Klein. Mr. Chairman, I have had quite a little service, some years ago with some of the gentlemen assembled here, 9 years in the Washington Navy Yard, and 15 years inspector of ordnance. In regard to the different sections of the bill, the question that comes up first in my mind is in regard to this fourth section. The naval ordnance plant has been in opera- tion, work being done there for nearly five years, so the majority of the employees there are not affected by this bill; but there are a number of employees there who Were transferred from other departments, being asked to go there by the Bureau of Ordnance, men of experience, to help build up the plant. On the 9th of this month, about 10 o'clock, orders were received to shut down the plant. The men were instructed to grease up the machines, and it is very doubtful if any mpre work will be done there. Mr. Smith. How much time did they give you? Mr. Klein. We got word at 10 o'clock in the morning, and the plant was shut down at 4.30. Mr. Smith. The same day? Mr. Klein. Yes. Mr. Smith. How long did you continue on the compensation roll? Mr. Klein. The mechanical employees quit at 4.30 that afternoon, and all they are entitled to is the leave earned to date. I left seven days later, being one of the admin- istrative employees. Now, there is one man in particular who has 14 jfears' service and is 60 years old. This section here would grant him a certificate which, if he were to obtain employ- ment in some other department at a later date and work even one year, would entitle him to come under the benefits of this act Another thing, taking the age limit. Now, a man may be able to perform his work, as a gentleman stated here, at 68, and feel himself a better man. But take the men who worked with me in the Washington Navy Yard, when we turn diameters on steel 33 inches in diameter and have that inspected by another man and checked to one one-thousandth of an inch for error; if he gets that one one-thousandth of an inch off he is censured for just that error. A man in a clerical position makes a mistake and he is corrected and perhaps censured for it; but when a man turns a diameter on© one-thousandth of an inch too small there is no correction for it; it means amother piece of steel must be turned. INCKEASE OF ANNUITIES UNDER RETtREMENT LAW. 37 Now, doing that ior years is an awful strain on a man. The machine he stands on costs about $100,000 and the gun itself costs more, and yet that is what that man is up against. Is it any wonder that a man reaching the age of 60 years, possibly taking care of his earnings, will feel "if I can have this annuity I can get rid of this strain and possibly add a little to my years. Now, I will be rid of that strain." I did that work when I was younger. My work now is to see that somebody else does it and to check them on the measurements. Comment was made about this feature "through no delinquency." There is a question. I am in favor of the bill as it stands, but these are just little details I want to commeiit on. "No delinquency on his part." That is the question that may come up some time. A man may make an error and yet be charged with a delinquency. A man may be failing and not realize it. He may even go so far as to be examined by a board and the board say he is still capable. Such things have occurred. Such things have occurred among the officers. A man may be failing in his line and a board of survey is called and he is examined and the board says, ' ' We can not find any- thing wrong with this man," and he is continued in the service, and yet everybody associated with the man realizes that there is something wrong with him. As I say, a man may be charged with delinquency when really it is not delinquency, but it is failing of his health, failing of eyesight or hearing, or failing of his nerve. Take a man running a fast passenger train, and the time comes when they say, "You must retire." Another says, "I will get out of this before I lose my nerve." I was with the railroad before I came with the Government. I favor this bill all the way through. This comment on this thing is just in regard to the details that might be arranged. The other feature that comes up is a man, as the party has said, where it rests with the supervisor whether he shall retire at 65 or not. I will give a case of this out at the plant: An officer in charge wanted to be just. He was just. I will give the officer credit for that. He was just. At that plant he allowed nobody to continue. It was justice to everybody at that plant. But it was injustice there because men were allowed to keep on at other places. There was one man there, a wagon builder. It is hard to find them these days. This man had been back in the woods. He reached 65 last May and had to retire. He had been only four years with the Government, but they could not find a man to take his place. They had a carpenter on that work and he did the work, but he was not a wagon builder and was not satisfactory. The superintendent said, "Old man Woodman is the best man I have got and the only man who knows that class of work." Yet that man was retired. Another man, a quarter man in the shell shop, reached the age of 65, and he had been a captain in the Spanish War, and he was retired at 65 and the officer in charge said he would play no favorites, but everyone in the outside plants was allowed to continue. The Chairman. That officer willfully disobeyed the provisions of the retirement law. Mr. Klein. There was nobody allowed to continue after reaching 65 years of age. The Chairman. The officer took it on himself to amend the law Congress had Mr. Klein. Those are just statements of what actually occurred. Mr. Smith. That is also true of Postmaster General Burleson. Doctor Reed. Mr. Chairman, I believe there are no more witnesses. We have one or two who have been detained who would like to submit briefs in the future, if that will be permitted. The Chairman. Yes; I suggest those who have in contemplation the filing of briefs do it as quickly as possible, so as not to delay the printing of the hearings unduly. Doctor Reed. I will so inform them. The Chairman. If you have no further representatives, there might be people here who would like individually to be heard, and the committee is glad to hear anyone who wishes to be heard. Mr. London. Mr. Chairman, I would like to ask the last witness whether from his personal observation he has not reached the conclusion that 90 per cent of the men who reach the age of 60 are incapable of hard physical toil, requiring concentration, at any rate. What is your observation with reference to that? Mr. Klein. That would depend on the position in which the man is working. If he was working on a machine having the strain, I should say that 65 should be his limit, unless he if doing special work; but I would say that he should be allowed to doitat 60ishe wished. . ■ , ,, , Mr. London. I have discussed this thing privately with Members, and there are some Members worried about this proposition of reducing it to the age of 60. Your personal observation is that in the branches of work which require great physical effort and simultaneous mental concentration that the great majority of people would be unfit above the age of 60; is not that your idea? 38 INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Mr. Klein. I would say at leaat 50 per cent of them. Mr. London. Fifty per cent? Mr. Klein. Yes; some are stronger than others at that age, but I would say a safe estimate would be 50 per cent. We can take President Roosevelt's figures in that regard with reference to the pension law of 1907, I think, where anyone.of the age of '65 was granted the full amount of pension. STATEMENT OF MB. H. W. STRICKLAND, SBCBETARY RAILWAY MAIL ASSOCIATION: Mr. Strickland. Mr. Chairman and gentlemen of the committee, the railway postal clerks are particularly interested in section 1 of this bill, which fixes annuities at the rate of |12, plus 1 per cent of the average salary of the last 10 years of service, , multiplied by the number of years of service. Under the act of May 22, 1920, the salary basis of annuity is limited to $1,200, while railway postal clerks are having deductions mad6 monthly at the rate of 2.5 per cent on'salaries that average about $2,100. By using the average salary of the last 10 years of service as a part of the basis upon which to determine the annuity a means would be provided by which the deductions from salaries above $1,200 would be reflected in the amount of annuity received. The first annual report of the board of actuaries upon the operation of the retire- ment law, made December 17, 1921, emphasizes the need of amending the law to secure an equitable adjustment of annuities in relation to contributions. The first recommendation in the report of the board states: " The benefits should be based on the same salary as that on which the contributions are paid, or they should be related directly to the amount of contributions." As shown in the report referred to, this condition could be rectified by providing a definite allowance on the part of the Government and allowing an additional benefit to the employee equal to the value of his accumulated contributions with interest. The provisions of section 1 of H. R. 10246 would correct the inequity of the present law and establish the correct and scientific principles. We feel, too, that optional retirement should be granted to an employee at ^0 years of age or more.i In fact, railway postal clerks strongly favor optional retire- ment after a 30-year service period as recommended by Postmaster General Hays. It is true that only a very small per cent of them would retire after a 30-year period or at the age of 60 years but it is only right and to the best interests of the Postal Service that they should be permitted to retire after such a period of service S they so desire. STATEMENT OF MR. WILLIAM D. CULLEEN. Mr. CuLLBEN. Mr. Chairman, I simply want to indorse what has been said to-day in regard to the mechanics. I have been a mechanic all my life and in place of work- ing 30 years I have worked 45 years, commencing from my apprenticeship to the present time. I am nearing the age of 60 years and I am what I call an all around mechanic, and I can tell you gentlemen I feel it now and I am ready to quit to-morrow. When you work machinery, when you work on the floor and work mentally also, you will find that at 60 years you are pretty well all in, and that is the way I feel. I am speaking from a personal standpoint, and I know there are hundreds of men the same way. My object in coming before you is in the interest of the amendment to the retire- ment bill. I wish to call your attention to the fact that 30 years is a long time to work at any laborious occupation. When you take into consideration the wear and tear on vitality of the man that has given the best that is in him to his Government, you will understand that it is absolutely a necessity to retire after 30 years' service in the Government, or anywhere else for that matter. I wish to cite you the condition in the shop in which I aSi employed. In 1896 there were about 200 men employed. Out of this number there are left to-day 22: They have passed away one by one and very few, my friends, reached the age of 65. I know, gentlemen, you will agree with me that after "a man has worked all of his life, at the age of 60 he is all in, and he is justly entitled to a kind consideration at the hapds of our Government. Another point I would like to draw your attention to at this time and that is that you can compare a man to a machine after 30 years' service. You will find by investiga- tion that nearly all men and machines are ready for the scrap pile at that age. It has been said that after all those years of service that a man should have looked out for the time when he would become old and feeble. How many men that have raised families have been able to put away any of their wages? After they have INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 39 paid the doctor, the undertaker, the grocer, and the baker there is nothing left for the man to help him over the road. Now, if his Government goes back on him, in the name of justice, who can he look to? There are many good features in this amend- ment, but I would like to call your attention to the one increasing the annuities. Though small, it would be a big help to the man that is down and out. I do not have to tell you about the high cost of living, and you are well aware of the conditions in Washington, how the business man of this town has bled us to a'finish. I know and feel that you will give this amendment the favorable consideration it deserves and I plead for its adoption in the name of the Government employees and their families. STATEMENT OF MB. N. P. ALIFAS, PRESIDENT OF DISTRICT LODGE NO. 44, GOVERNMENT EMPLOYEES, INTERNATIONAL ASSOCI- ATION OF MACHINISTS. Mr. Alifas. Mr. Chairman, I am authorized to represent machinists, toolmakers' and others employed in the Government service. Our members generally are in favor of the bill (H. R. 10246) which is now before you, introduced by Congressman Fairfield. You have heard so many of the representatives of the employees this morning that I surmise there is scarcely an argument that has not been presented. However, we are in favor of the Fairfield bill with such modifications as will make the bill remedy the shortcomings of the present law that the apparent intent of its language indicates. What I mean by that is that the language in some cases needs clarifying. I invite your attention to section 3, which says "that employees who have not reached the age of 60 shall have the right to make application for retire- ment on annuities diminished at the rate of 3 per cent for each year under 60." I take it that they shall not only have the right to make application but shall have the right to annuities on application. You gentlemen are sufficiently skilled in the framing of language to make the intent in that case a little clearer. The Chairman. Is that the intent of section 3, or is it that they shall be granted an annuity certificate which will be effective when they reach the age of 60? What is your idea? Mr. Alifas. No. That is the intent of section 4. I am referring to section 3. I believe the wording is inadequate. At the present time they might be said to have the right to make application, but the Government has not the right to give them the annuity; so I assume the intention is to give the employees the right to the annui- ties upon, making applicatjion. Mr. Fairfield. This is an amendment to the original bill which was drawn for the granting of annuities, and the granting of the annuity is carried in other parts of that bill. It might be well to modify that statement, however. Mr. Alifas. It would not do any harm to make it read in such manner as will leave no doubt as to the intent. I therefore desire to urge your committee to report favorably H. R. 10246 to the House of Representatives, amending it in such manner, if you desire, as will make the plain intent of the several sections as positive and definite as possible. Permit me to comment on the several sections seriatim, as follows: Section 1. The annuities provided under existing law range from $720 as a maxi- mum to $180 as a minimum, determined in accordance with the length of service rendered by the employee affected and his average rate of pay for the 10 years pre- ceding ,his retirement. These annuities have been found to be inadequate to pro- vide a standard of living for these superannuated employees and their dependents compatible with health and a proper sense of pride in maintaining their independence of charity. While the maximum under the proposed legislation will be $1,200 per annum, which by no means can be. considered excessive since it applied only to the higher paid class of employees of long service, the actual annuities under the proposed bill when applied to the salary range of mechanics and clerks is not much above the amounts allowed under existing law. For instance, a workman with 30 years of serv- ice to his credit and receiving $1,200 per annum, or $3.84 per diem, would, under existing law, receive an annuity of $720; under the proposed bill he would also receive only $720, but with 35 years of service his annuity would be a little more— $840 to be exact. . ■, • , j ■ , j Section 2. Under existing law employees m the mechanical trades are not entitled to the benefits of the retirement act until they have reached the age of 65. Under conditions where large numbers of men are being discharged, men of advanced age are continually fearful that they will be separated from the service before they reach 'the age of retirement. 40 INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Under existing civil-service regulations the efficiency of an employee is the deter- mining factor in his retention in the service. When the working forces are heing reduced in the Government service as at present, employees past the age of 60 often have reason to be fearful that from a viewpoint of efficiency their performances may be considered unfavorable when compared with the work of men much younger. Many employees have a sufficient amount of pride to prefer to voluntarily retire from the service under an annuity which they have earned, rather than be subjected to the humiliation of being considered "has beens." We believe, therefore, that when an employee has reached the age of 60 that he should be permitted to retire on an annuity in accordance with the number of years of service which he has rendered. Section 3. Many employees of the Government who have served 15 years or more and yet who are under 60 have become broken in health or otherwise incapable of competing with younger men under a scheme where absolute efficiency is the deter- mining factor in retention in the service. We believe that such men, to escape humiliation of discharge when forces are being reduced and also to assure them of a continued opportunity to make a livelihood, should be entitled to voluntarily retire on an annuity in accordance with the terms of this section. Many of this class of employees who have served 15 years or more are sufficiently incapacitated to be unable to compete with younger and stronger men but are not sufficiently incapacitated to come within the provisions of the disability section of the retirement act of May 22, 1920. The language of section 3 provides that such employees "shall have the right to make application for retirement on annuities." This language possibly should be amplified so as to give them "the right of retirement on annuities upon application for same " on their part. This section should be so worded as to confer its benefits upon all employees who have been separated from the service since the enactment of the retirement act of May 22, 1920. Section 4. During the past year drastic reductions have taken plaCe in the navy yard and arsenal service, These reductions have been made supposedly in accord- ance with relative efficiency. Men who have served the United States Government from 15 to 30 years or more, with large families, have been discharged and other employees who have served less than five years who have no families have been retained. Under the retirement act of May 22, 1920, these men practically none of whom have reached the age of retirement of 65, are deprived of all annuity benefits from the Government to which they should morally be entitled under a fair and eqtiitable plan of dealing with employees in the ci\dl service. We believe, therefore, that legislation as provided in this section or its equivalent should be enacted which would entitle all employees who have been discharged for lack of work or lack of appropriations and without delinquency, to a certificate signed by the Commissioner of Pensions to the effect that such employee is entitled to an annuity from the Government whenever he reaches the age of 60 years, wherever he may be employed, or whether he is em- ployed or not, in accordance with the rates of annuities as contemplated by section 1 of this act. This section should be worded so as to extend its benefits to employees who have been separated from the service since the retirement act became law, May 22, 1920. We have instances of where employees have been discharged for lack of work who have had 30 years of service and who would be entitled to an annuity of $720 per year if thejr were retained in the service a few months longer. Their chances of reemploy- ment in the Government service or for employment in private industry at their age are not promising. They have given the best years of their lives in the service of the Government. Prior to the enactment of the retirement act of May, 1920, the United States Govern- ment felt under obligation, due to humanitarian considerations, to keep in its employ men ■who had given long and faithful service; but with the enactment of the retire- ment act of May 22, 1920, many department heads felt warranted in dismissing all employees in accordance with their relative efficiency, disregarding the sympathetic and generous purpose behind the enactment of that legislation; and which generous attitude should still prevail for employees not benefited by the act. Surely, if it was considered improper by the Government to discharge an old, faith- ful employee prior to the enactment of retirement legislation, it would be equally reprehensible to do so after that act had been placed upon the statute books, merely because it did not provide annuities for all persons who would thus be subjected to hardships. We believe that your committee is now justified in recommending legislation which will have the effect of relieving hardships similar to those which the retirement act of 1920 was designed to relieve. INCBEASE OF ANNUITIES UNDEE EETIEEMENT LAW. 41 Legislation, like a new invention, does not always fulfill the purpose for which it wasdesigned. In the case of the inventor, he does not hesitate to modify his machine so that It will work; in the case of legislation which proves to be inadequate, legislators should not hesitate to subsequently modify it in such a way that it will achieve the d^red purpose, in this case the purpose being humanitarian. The Chaibman, The committee is ready to- hear any individual who desires to express his views on this legislation. STATEMENT OF MR. J. W. STARR. Mr. Starr. Mr. Chairman and gentlemen of the committee: There are some things here that we agree with entirely in relation to this bill; there are some that we do not agree with . The bill aa presented here seems to be a bill that applies to those who are now 111 the service and receiving full salaries and not to those who are out of the service receiving no salaries, but very meager annuities. It has been said that this bill, known as the Fairfield bill, covers all that we would ask. It may, but our people whom I represent are liable to be covered with mother earth before this bill becomes a law. That is the difficulty that we have to meet. We believe that bill 6433 will best take care of those who are now out of service and who are in want. It is for them that I speak. The amount of money that it will take to relieve those— and if this bill 6433 should become a law all of those in the service will be relieved to the same extent that those are out of the service. I was very much interested in the statement that Mr. Fairfield made at the last hearing. That statement shows that there are $16,000,000 now invested, and that this is from two to four millions in excess over what the actuaries calculated would be in the fund when the payments were received. Speaking of the cost of the retirement bill, that of 10246 can not be very well pre- pared unless the actuaries have the matter taken in hand and go over it thoroughly. In the case of these statements which are official, we find that the amount paid out on account ofretirement to June 30, 1921, is 12,913,547.34; June 30, 1922, $3,288,637.57. There were 85,000 people that left the service since that law went into effect and their accounts have been adjudicated and the refunds paid to within about 20,000. I have the official figures here. Those amounts must be deducted from the amounts paid out on account of annuities, because they will never be paid again; they have been withdrawn and the people have left the service and gone. The excess amount over what the actuaries calculated would be in the fund might be applied to the cost of bill 6433, and the cost as near as we can estimate of the bill 6433 would be about 66 per cent of the present cost, which would be a much smaller , amount of money than necessary to take care of the Fairfield bill. There are also in this bill at least two constructions of the bill as drawn. In this bill if a man has an average salary of |1,400 and has served 33 years, you take 1 per cent of it and multiply it by 33 years and add the f 12 that this bill gives him, and you will find that that amount reduces a man's annuity instead of increasing it. The Chairman. Let me state, Mr. Starr, that Mr. Fairfield at the previous hearing stated the comma after the $12 in the bill is a typographical error, and eliminating the comma the bill would not be susceptible to the construction you are calling atten- tion to. It means $12 plus 1 per cent multiplied by the number of years of service. The $12 and the 1 per cent are added together and then multiplied by the number of years of service. Mr. Starr. If the bill is amended in that particular it would be so, but I deemed it necessary to call your attention to it. Mr. Fairfield. I called, attention to that immediately. Mr. Starr. I had not heard that. Now, to show you that the bill 6433 would not cost more than 66 per cent additional to what they are receiving, I have here the number and the amount of the annuities that were paid by the Government up to December 31, 1920. That statement shows those receiving $720 number 2,238, and that it is about one-third, and that those who received less amounts are about 66 per cent, and though the annuities going in in- creased ratio to those people getting smaller amounts, yet ihe amounts are so small that it will not reach more than .66 per cent on the whole bill. For instance, take the number of people retired at from $400 to $499, you will find that there are great num- bers of them who have only one man of each amount, and that the amount differs only 1 and 2 cents up to about $100 in that particular class that receive $400 or over, and that there are 240, about, of those people; that in the $300 class there are more. So that in making a new bill, as this bill though called an amendment would be, it will necessitate the actuaries figuring all these amounts that are stipulated here and those that have been added since, making some 8,000 calculations, with the exception that 42 INCEEASSE OF ANNUITIES UNDER RETIREMENT LAW. while the number is one moetly in each of those lower classes, they do run up some- times to 2, sometimes to 5, sometimes 129, sometimes 19, sometimes 10, etc. It is very changeable. The Chairman. Do you desire to insert that in the record, Mr. Starr? Mr. Stakr. Yes, sir, Mr. Chairman. The Chairman. It may be inserted. Number of employees retired upon annuity under the act of May : ana disability , by rates per annum. 19t0, retired for age Bate. »720. $719, 1719. 1718, S718. S718. 1718. 1717. $716. $716. $716 $715. $715. $715. $715. $714. $714. $714. $713. $713 $712. $712. $712. $718. 1712 $710, $710, $71Q $709, $709, $709, $709, $708, $708, $708, $707, $706, $705, $705, $705, $704 $703, $703, $703, $701, $701, $701 ,00. $699.25.. $699.01.. $698.68.. $897.82.. $697.60.. $697.39.. $697.33.. $696.83.. $696.50.. $695.83.. $696.10.. 4695.09.. $694.06.. $893.67.. $691.80.. $691.42.. $490.67.. $890.60.. Number retired for — Age. 2,238 2 Disa- bility. $690.26. $690.06, $689.76, $689.44, $689.77, $688.70. $688.57. $688.42, $688.40, $687.51, $687.47. $687.35. $686.73, $686.44, $686.15, $684.93, $684.18, $683.39. $683.26. $683.00. $682.36. $682.33. $681.64. $681.50. $680.53. $679.65. $679.09. 1679.08. $679.07. $678.70. $678.58. $678.38. $678.34. $677.59. $676.35. $676.19. $674.78. $673.50. $672.67. $672.17. $671.60. $670.91. $670.66. $670.25. $665.33. $863.73. $682.86. $682.72. $662.00. $860.80. $860 00. $669.20. $858.63. $658.48. $858.33. $867.00. $856.33. $854.52. S654.00. $653.80. $663.13. $861.86, $661.73, $651.28, $861.10, Number retired tor— I Age. Disa- biUty. $649.96... $648.90... $648.86... $648.68..'. $648.20... $648.00... $647.85... $647.76... $647.70... $647.69... $646.87... $646.60... $646.49... $646.33... $646.00... $644.80... $644.41... $644.32... $643.42... $643.40... $643.20... $643.00... $642.83... $642.61... $642.45... $641.88... $641.67... $641.47... $641.10... $640.33... $640.20... $640.08... $640.00... $639.53... $639.41... $639.33... $639.00... $638.59... $638.43... $638.33... $637.88... $637.49... $635.25... $635.10... $634.44... $634.15... $633.«3... $633.30... $632.78... $631.73... $631.60... $630.50... $830.22... $630.13... $629.13... $829.00... $628.85... $627.38... $627.15... $626.26... $626.00... $625.81... $025.68.. $623.47... $623.33... $621.00... Number retired fot- Age. 16 Disa- bility. INCBEASB OF ANNUITIES UNDER RETIREMENT LAW. 43 Number of employees retired upon annuity under the act of May t2, 1920, retired for age and dianbuity, by rates per annum — Cfontinued. Number retired for— Age. Disa- bility. 170 Rate. $669.75 1669.17 8569.16 $669.10 $668.12 $570.20 $.566.83 $666.10 $665.84 $564.16 $.563.54 $.563.26 $562.69 $562.54 $662.01 $561.68 $561.66 $660.32 $559.66 $558.98 $558.15 $567.29 8557.20 $566.92 $487.79.... $487.08 $487.00 $486.96 $486.56 $483.71 . . . . $483.18..-. S483.08. . - . $482.81 $482.29 $482.08 $481.97 $481.60 $481.62 $481.37 $481.32 $481.08 $480.00.... $479.47 $479.27 $479.13 $478.80 $477.93 $477.63 $477.40.... $477.28 $476.66 $476.65 $476.45 $476.24 $476.01 $474.96 ^74.90.... $474.86.... .$474.67.... $474.40.... $473.70;... $473.42.... $473.20.... $473.00.... $472.65.... $471.16.... $469.90.... $469.81.... $469.51 . . . , $469.48..., $467.48..., $466.38. . . $466.31..., $464.91... $464.39... $463.88..., Number retired for- Age. Disa- bUity. Bate. $463.74.. $462.35. . $462.30.. $462.00.. $461.33.. $460.63.. $460.57.. $460.20.. $459.90. . $459.65. . $458.15.. $467.92.. $467.52.. $455.33.. $455.22.. $455.14.. $464.60. . $464.19. . $454.10.. $463.60.. $452.67.. $451.63.. $451.40.. $451.21.. $451.16.. $451.16.. $460.62.. $450.40. . $450.27. . $448.63.. $448.78. . $446.64.. $446.61 . . $446.57. . $446.36.. $445.50.. $444.74.. $444.70.. $444.37.. $444.31.. $444.90., $443.44.. $443.21.. $443.16.. $442.05.. $441.96., $440.80., $439.84., $438.95., $438.75. $437.97. $437.84. $437.80. $437.65. $437.37. $437.02. $436.00. $436.68.. $436.48.. $436.45.. $436.32.. $435.88.. $435.80.. $435.78.. $435.60.. $435.33.. $436.08.. $434.95.. $434.55.. $433.87.. $433.37.. $433.08.. $433.00.. $432.00.. $431.60.. $430.92.. Number retired lor— Age. Disa- bility. 44 INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Number of employees retired upon annuity und^r the act of May .^2, 19S0, retired for age and disability, by rates per annuTn — Continued. Number retired for— Age. 18 Disa- biUty. Bate. S411.70. 8411.69. $411,45. $411.34. $411.29. $411.27. $410.80. $410.74. $410.71. $410.54. $410.41. $410.40. $410.34. $409.90 $409.69 $409.46 $409.39 $409.20 $409.00 $408.41 $408.31 $408. 35 $408.19 $408. 16 $408. 10 $408. 07 $40&02 $407. 80 $407.60 $407.44 $407.20 $407.15 $406.78 $406.66 $406. 03. $405.89 $405.81 $406.71 $405.47 $404.99 $403^66 $403.67 $403.36 $403. 34 $403.20 $403.00, $402.63 $402.35, $402.12, $401.73 $401.40. $401.14, $400.92 $400.68, $400.67 $400.49 $400.18, $399.41 $398.91 $398. .34, $398. 16 $397.72. $397.66, $396. 44. $396.40, $396.17, $396.06, $396.00, $395. 82 $395. 68, $395.52, $396.17 $394.96, $394.94, $394.46, $394.20, Number retired tor— Age. 15 10 Disa- bility. Rate. $394.05 $393.98 $393.71 $393.62 $393. 12 $392.98 $392.89 $392. 81 $392.37 $392.20 $.391. 88 $391. 26 $390.66 $390.44, $390.08 $388.80, $388.50 $387.71 $387.62 $387.52, $386.83. $386.62, $374.90, $.386.61, $388.62, $386.00, $386.66, $384.59, $384.21, $383.30, $382.92, $382.60, $382.42, $382.25, $382.14, $382.00, $381.60, $378.68, $378.35. $378.00. $377.74. $377.15. $376.75. $376.30. $374.85. $374.37. $373,96. $372.69. $372.10. $371.98. $371.29. $370.94. $370.80. $370... $369.79. $369.64. $369.36. $369.23. $368.98. $368.70. $367.80. $367.51. $366.37. $366.12. $366.03. $364.92. $364.83.. $363.59. $363.17. $361.98. $360.38. $360... $369.64. $358.78. $367.58. INCREASE OF ANNUITIES UNDER RETIREMENT LAW. 45 Number of employees retired upon annuity under the act of May tt, IStO, retired for age and disability, by rates per annum — Continued. Number retired for— Age. 23 38 Disa- bility. Rate. 1343.93.. S343.83.. J343.69.. $313.64.. $343.59.. $343.57.. $343.39.. $343.33.. $343.31 . . $343.29.. $343.19.. $342.63.. $342.62.. $342.51.. $342,31.. $342.23.. $342.07.. $342.00. . $341.30. . $341.27.. $341.16.. $340.89.. $340.57.. $340.40.. $340.26.. $340.14.. $339.32.. $339.31 . . $339.15.. $339.08.. $338.93.. $338.83.. $338.82.. $338.78 . , $338.69.. $338.63.. $338.59.. $338.53.. $338.40.. $338.39.. $338.09.. $338.07.. $337.86.. $337.83.. $337.80.. $337.48.. $337.45.. $337.03.. $336.83.. $336.19.. $336.18.. $335.67.. $335.38.. $334.99.. $334.40.. $334.10.. $333.45.. $332.93.. $332.81 . . $332.62.. $332.16.. $.331.88.. $331.63.. $331.61.. $331.25.. $331.03.. $330.68.. $330.38.. $330.24.. $330.12.. $329.76.. $329.75.. $329.71.. $329.38.. $328.57. . $328.32.. Number retired tor— Age. 43 Disa- biUty. Bate. $328.07.. $327.42.. $326.65.. $325.86.. $325.69.. $325.04.. $324.92. . $324.87.. $324.83.. $324.53.. $324.34. . $324.26.. $324.02.. $324.00.. $323.45.. $323.07.. $323.03.. $322.97.. $321.82.. $321.19.. $320.93.. $320.55.. $319.80.. $319.63.. $319.20.. $318.81.. $318.60.. $318.44.. $318.30.. $318.23. ■. $318.12.. $317.47.. $3)6.71.. $316.27. . $315.87. . $315.76. . $315.75.. $315.71.. $315.33. . $314.91.. $314.90. . $314.43.. $313.36. . $312.44. . $312.39. . $311.71.. $311.65. . $311.00. . $310.92.. $310.87.. $310.25. . $309,68. . $309.44.. $309,39. . $308,25. . $308.16.. $307.80.. $307,32. . $307.16.. $307.05. . $306.96. . $308,33. . $306,31.. $305.06. . $304.80. . $304.40. . $304.29. . $304.16. . $304.00. . $303.61.. $303.00.. $302.40. . $302.23.. $301.02.. $300.84. . $299.56.. Nvunber retired for— 46 INCREASE OF ANNUITIES UNDER RETIREMENT LAW. Numher of employees retired upon annuity under the act of May £;?, 1910, retired for age and disability, by rates per annum — Continued. Bate. Number retired • for— Rate. Number retired for— Bate. Number retired for— Age. Disar bility. Age. Disar biUty. Age. DiSOr bility. $297 84 ........ $271.17 $270.12 $270.00 $269.84 . . i $249.44 ; . . . 'tnoR an $248.82 $295 34 $247.99 129284 $246.86 1 $246.43 $26810 $245.36 $244.12 . . $26374 . . $243.78 |||-|8 $242.47 $240.00.... $288 00 $263.56 $262.80 $239.40 . "" $287.50 $2.W.04 $287.31 $261.93 $261.79 $261.26 $261.12 8237.60 $286.26 $237.37.... $286.20 $236.44 $285.27 $231.47 $284.24 $259.97 $230.34 $283.81 $259.20 $217.68-.-. $283.07 $258.78 $216.00 $282.67 . ... $257.12 $256.53 $211.45 $281.41 $209.00 $280.85 $255.45 $255.13 $254.94 $254.34 $263.75 I 1 $204.33-.-. $280.59 $203.09 $280.25 $194.94 $278.10 $188.32.; $277.20 $180.00---. $276.08 $252.00 $250.64 $250.13 $249.82 Total------ $273.60 4,761 37 $273.02 $273.00 $272:31 . . . $249.63 Mr. Smith. Mr. Starr, would you object to telling us how long you were in the service? Mr. Starr. I have been in the service since 1875. Mr. Smith. What character of work did you perform? Mr. Starr. In the War Department. Mr. Smith. In^the War Department. Did you perform clerical work? Mr. Starr. Clerical work. Mr. Smith. What annuity do you now receive? Mr. Starr. I receive $720 annuity. Mr. Smith. If this amendment to the legislation is adopted you would receive how much? ■ Mr. Starr. $1,152; and the minimum who receive now $180 would receive $360, and we think there is plenty of money in the Treasury to warrant the payment of that money and to be paid out of the excess that the fund has brought in instead of the amount that the actuaries figure. Mr. Smith. Your statement at the beginning was that you did not think this bill of Mr. Fairfield's included those already on the annuity list? Mr. Starr. No; I did not say that. But I do say that this bill of Mr. Fairfield's will involve so much time and figuring, etc. , that it is going to be a long time, and that the people we represent in the Association of Retired Government Employees are hungry now and they can not wait long. Some of them have tried to wait and they have passed over the Great Divide, and the $15 is not very much for. those people. Mr. Fairweld. Mr. Starr, do you not think after all that the judgment of the actua- ries that this is not really a surplus but that ultimately their figures will be relatively correct and that every dollar of that that has accumulated is practically obligated? I think there is a very grave misunderstanding. I was talking to a gentleman this morning who thought there was a gteat volume of money accumulating, more than enough to take care of any necessary additional expense we might go to. I know my bill will cost more, but it will mean perhaps a larger percentage. We might as well be frank and honest in regard to this whole proposition, and I have put into the record the square statement of the actuaries as to the increased cost. Of course, the committee INCBEASE OF AIS'NXJITIBS UNDER EETHtEMENT LAW. 47 ■will go into that carefully, and I think there should be Bome remedial legislation. I am thoroughly and honestly convinced that is true, particularly in the condition we find ourselves now, taking the thoiisands of men who have recently been let out and who are not involved at all, who are not comparable to the situation in which you find j^ourself . I think it is more important to take care of them than to increase the annui- ties of the old employees, although 1 am by no means opposed to the principle involved. Mr. Starr. If you make a law increasing the old employees you are going to increase those who have been retired. Mr. FAiRriBLD. I am talking about these men cut off arbitrarily without any oppor- tunity and before the retirement age. Suppose your case had been that you had been dropped after serving 30 or 40 years, and as one man said, 44 years of service, and had not reached the retirement age, you would not get a cent. I think you are infinitely better off tban those men. The Chairman. Let me make this suggestion in line with what Mr. Fairfield said as to this apparent surplus. You appreciate, of course, that every penny contributed is withdrawable upon separation from the service with compound interest. At the present time no person who separates from the service and withdraws his contribution draws more than 2^ per cent of one year's pay, but as time goes on you will have 50,000 separations annually, and in 10 years you will not have 130 coming to each one of those 50,000, but you have $300, compounded for 10 years, coming to those 50,000. If you fritter away the money contributed in the course of the 10 years how are you going to get the money to return to them? Mr. Stare. I think I understand it along the lines you mention, Mr. Chairman. I am sometimes called the father of retirement. I wrote the letters that called the movement together and I have followed it through, and what you say about the in- creased coat in the future is demonstrated not by theory or mere figures, but it is demonstrated by the actual experience of the Grand Trunk Line of Canada, where the men pay 2f per cent of their salary into the fund and the railroad pays 2i per cent, and at the end of 29 years they have five times as much surplus as the whole business has cost them. The Chairman. Yes; because the railroad in fact put the 2J per cent in as the employees put their money in. If the Government would do that at the present time you would not hear anything about it not costing anything, because the Government would have to appropriate $16,000,000, which is the amount contributed by the employees. Mr. London. Does not the Government contribute at least nominally? The Chairman. It does not contribute a single cent. Mr. Fairfield. Except for administration. The Chairman. Except to pay the clerks' hire, but a contribution does not even appear on the books of the Treasury Department. Mr. London. Then it does not mean that the Government's money is earning interest, as in the case of the other funds? The Chairman. No; but it is using the employees' money, which the Government is borrowing from them at compound interest, which they must eventually return. Mr. Starr. That is very true, but we think that the figures have been too high. For instance, when the Keep Commission was investigating this matter, Mr. Herbert D. Brown was the actuary, and he said that 3.57'per cent would retire under the Keep Commission's bill or plan, and General Aingworth, figuring up the cost of retirement of the Army officers and having 45 years of experience, said that 3.5 per cent of their salaries would retire them, and you know the general officers receive retirement salaries into the thousands, some $8,000 or $9,000, I think, the highest— that that would be 3.5 per cent. So you have that from the experience of the Army of 3.5; you have it from Mr. Brown's figuring for the Keep Commission of 3.57 per cent; and you have it from the actuaries of 3.56— the present actuaries that have been figuring these bills — would take care of them imder that law. So the necessity for the payment of 4 or 5 per cent is very doubtful. Mr. Fairfield. That is under the present annuities, but if you increase the annuities up to $1,200 the percentage would have to be essentially increased, would it not? Mr. Starr. It would be increased about 6 per cent. Mr. Fairfield. Of the 3.57 per cent, which would make it between 5 and 6 per cent. Mr. Starr. No; of the present amounts of annuities paid. In asking you in relation to this to consider that bill thoroughly and fairly, as you will, we are in the position of helping those who can not help themselves. 'The law was intended, as we started it, to be a beneficent law. It has been to some, but it has turned out to the majority of' these men, as was said by a Member of Congress at the last m'eeting, a punishment. They do not have enough. And the law as it has been administered turns out men of 70 years of age who can not get work anywhere else, and they are forced to live on 97037—22 i 48 INCREASE OF ANNUITIES UNDER BETIEEMBNT LAW. these annuitiea that are granted in the law. It is for those people particularly that we are speaking to-day, and I will say to you what the President of the United States said at Arlington on the 30th day -of May relative to the humanity of the American people. ' The President in an addrgss at Arlington, Va., May 30, 1921, among other things, said: "I counsel no selfishness, no little Americanism, or mere parochialism, when I ui^e that our first duty is to our own, and that in the measure of its performance we will find the true gauge of our capacity to be helpful to others. " That is the situation of others, and you gentleman of the committee need have no fear that your constituents will condemn you if you should graut this amendment to the law. The Government of the United States has sent billions to dependents of the Allies, sixty million to the Near East, twenty million to Russia; and the American people, not satisfied with what you have done, feeling that you have not covered all of these expenses, have contributed and are contributing to-day to the Red Cross an amount from which they are spending ten millions to help the soldiers, and they have contributed millions to the Young Men's Christian Association, to the Knights of Columbus, to the Salvation Army, to the Young Women's Christian Association, and they are still contributing. And in this connection I nMght tell you a little story that is historical. In the fifties there was a great famine in Ireland; the potato crop was a clear, clean failure, and at that time our ships took six weeks to cross the ocean, and when the news reached here our people began to assemble and organize in order to relieve that famine. There was a gentleman in New York who on hearing and learning of it immediately acted and took the train to New York City and hired a ship, loaded it with vegetables, clothing, etc., for their relief and sent it over. He did not wait for organization or anything of that kind, because the people were starving. And it reached there and it was there before our people got another ship started, and it Was distributed to those people. That man was afterward a general in our Army and was killed at Chancellorsville, but he had a son left and that son to-day is in the Okited States Senate. He was a candidate in the last campaign, and he was a can- didate with the new voters, the Woman Suffragists against him, but he was elected, and he will be elected as lon^ as there are Irish in this country, and ther&is no power in the Democratic orgairization or in Tammany Hall or in, the church to prevent those people votingfor this man whose father helped them in that hour of distr^a. The Chairman. Had you not better put into the record the name of the gentleman whose tenure of office in the Senate you thus guarantee? Mr. Starr. James W. Wadsworth, of New York. [Applause.] Now that is the situation, and you need have no fear. The Chairman. The hearings on these bills will now adjourn. ■ Mr. Jeffers. Mr. Chairman, here is a telegram I would like to insert. The Chairman. All right; it may be inserted. '^ (The telegram is as follows:) Anniston, Ala., Fc5ntirj/ ^0, i?:??. Hon. Lamar Jeffers, Member Congress, Washington, D. 0. Dear Sir: At a meeting of the postal employees here to-day the Fairfield hill (H. E. 10246) was indorsed as meeting their approval, while the Rosedale bill (H. R. 9832) was second choice. We thank you for your interest in the matter and request ^our support for the bill. Yours very respectfully, J. L. Crawley (And others). statement in support op the proposal to amend the act approved may 22, 1920, providing for retirement for employees in the federal civil service. By C. P. Prancisous, President United National' Association ol Post Office Clerls. Since August 20, 1920, the day upon which the retirement act became effective, the association has endeavored to observe with extreme care just how this law would operate. We feel that the retirement act has in principle conferred many blessii^ upon the employees in the civil service. We realize that it has gone far toward renaoving the agonies of mind which accompany superannuation for which no pro- vision is made. For all these things we desire to express to the Congress the very deep appreciation of those for whom we are privileged to speak. IN-CKEASE OF A^fNTJITIES tTNDEE BBTIBBMENT LAW. 49 The association feels, however, that the retirement act has, in practice, developed many defects. Chief among these are, first, the excessively long period of service an employee must render before becoming eligible for retirement; second, the utterly inadequate annuity provided by the act; and, third, appears to be the total absence of any consideration for the employee who is involuntarily retired from the service through no fault of his own prior to such employee having reached the retirement age. Of the many bills introduced in Congress seeking to amend the retirement act, we find a few only which we believe could be perfected so that the interests of all civil- service employees would be best safeguarded. These are the Rossdale bill (H. R. 9853), the Fairfield bill (H. R. 246), and the bill introduced by Senator Charles E. Townsend, known as S. 1762. We have carefully examined all these bills, and we regret to say that we are unable to give indorsement to any of them. We believe that postal employees should be permitted at their option to retire from the service after 30 years, at the maximum annuity. We believe also that the maximum annuity to be paid should not be less than $1,200. We believe, further, that it an employee is to retire, or is to have the privilege of retiring, after 30 years of service, then he should enjoy such privilege without regard to what his age might be at the completion of his 30 years of service. The association feels that if the Townsend bill were perfected by the addition of flection 1 of the Rossdale bill, providing optional retirement after 30 years of service, and section 4 of the Fairfield bill, which would extend the benefits of the retirement act to those employees who were involuntarily separated from the service before reach- ing retirement age, that such perfected bill would best promote the interests and the welfare of both the Government and the civil-service employees. For these reasons the United National Association of Post Office Clerks respectfully urges upon the committee the kindly consideration of the amendments referred to .above. The Chairman. I would like to repeat that those who coiiteiaplate filii^ briefs should do so as speedily as possible in order not to delay the publication of the hearings. The committee stands adjurned. (Whereupon the committee adjourned sine die.) Cornell University Library JK 791.A5 1922el Increase of annuities under retjff mf J' ' 3 1924 002 434 441