Cornell University Library JK 791.A5 1918f Retirement o1 employees In the classifie 3 1924 002 434 086 4 JK U. S. Congress. Senate. Committee on Civil 791 Service and Retrenchment. A5 Retirement of employees in classified civi 19l8f service. THE LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY RETIREMENT OF EMPLOYEES IN CLASSI- FIED CIVIL SERVICE HEARING BEFORE THE COMMITTEE ON CIVIL SERVICE AND RETRENCHMENT UNITED STATES SENATE SIXTY-FIFTH CONGEESS SECOND SESSION ON S. 4637 BILL FOK THE RETIREMENT OF EMPLOYEES IN THE CIVIL SERVICE AUGUST 28, 1918 Printed for the use of the Committee on Civil Service and Retrenchment WASHINGTON GOVERNMENT PRINTING OFFICE 1918 COMMITTEE ON CIVIL SERVICE AND RETRENCHMENT. KENNETH D. McKELLAE, of Tennessee, Chairman. HENRY F. HOLLIS, of New Hampshire. ALBERT B. CUMMINS, of Iowa. JOSEPH E. EANSDELL, of Louisiana. ROBERT M. LA FOLLETTB, of Wisconsin. JOHN H. BANKHEAD, of Alabama. REED SMOOT, of Utah. WILLIAM F. KIRBY, of Arkansas. LE BARON B. COLT, of Rhode Island. JQSIAH O. WOLCOTT, of Delaware. HIRAM W. JOHNSON, of California. Ed Albhight, Olerk. 11/ RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. WEDNESDAY, AXTGUST 28, 1918. , United States Senate, ■Committee on Civil Service and Retrenchment, 'Washington^ D. G. o^J^® committee met, pursuant to the call of the chairman, in room 248,benate Oflttce Building, Senator Kenneth D.McKellar presiding. Present: Senators McKellar (chairman) and Colt. There were present also the following: Mr. John S. Beach, presi- dent of the Federal Employees' Union,, No. 2, acting president Na- tioftal Federation of Federal Employees; Dr. Llewellyn Jordan, Secretary United States Civil Service Retirement Association; Mr. Edward J. Gainor, president National Association of Letter Car- riers ; Mr. Edward J. Ryan, jireSident Railway Mail Association; Mr. R. A. Alcorn, chairman joint retirement committee. Naval Gun Factory; Mr^ George T. Keyes, 79 Wall Street^ secretary of the National Civil Service Retirement Lealgue ; Mr. J. D. Maddrill, actuary of the United States Bureau of EfBciency; and Mr. Richard H. Dana, of Boston, Mass. The committee proceeded to consider thfe bill (S. 4637) for the retirement of employees in the classified civil service, which is as follows: ' IS. 4637, Sixty-fifth Congress, second session.] A BILL' For the retirement of employees In the classlfled civil service. ■ Be it Enacted by the Senate and House of Representatives of the United States of America in Congress assemMed)' Tl^mt, beginning on the first day of July next following the passage of this act; fcll employees in the classified civil service of the United States Who have on that date or shall have on any date thereafter reached the age of sixty-eight years shall be eligiblie for retirement on an annuity as hereinafter provided : Provided, That mechanics, city and rural letter carriers, and railway mail clerks shall be eligible for retirement at sixty-five' years of a.ge: Provided further. That postmasters shall not be included in the provisions of this act. Sec. 2. That for the purpose of determining the' amoilnt of annuity which retired employees shall receive the fbUQwi^ig Classifleatioiis and rates shall be established : ' ' u - Class A shall ' include all eiiiployees to whom this act applies who shall have' served the United States for a total period of thirty years or more. Class B shall include all employees to whom this act applies who shall have served the United States for a total period of twenty-five years or more, but less than thirty years. Class C" shall include all employees to whom this act applies who shall have served the United States for a total period of twenty years or more, but less than twenty-five years. Class D shall include all employees to whom this act applies who shall have served the United States for a totaljperiod of fifteen years or more, but less than twenty years. 3 4 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. The annuity to a retired employee in class A shall equal fifty per centum of such employee's average annual basis salary, pay, or compensation from the United States for the ten years next preceding the date on which he or she retired: Provided, That in no case shall an annuity in this class exceed $600 per annum. The annuity to a retired employee in class B shall, equal forty per centum of such employee's average annual basis salary, pay, or compensation from the United States for the ten years next preceding the date on which he or she retired :; Provided, That in no case shall an annuity in this class exceed $540 per annum. The annuity to a retired employee in class C shall equal thirty per centum of such employee's average annual basic salary, pay, or compensation from the United States for the ten years next preceding the date on which he or she retired: Provided, That in no case shall an annuity in this class exceed $480 per annum. The annuity to a retired employee in class D shall equal twenty-five per centum of such employee's average annual basic salary, pay, or 'compensation from the United States for the ten years next preceding the date on which he or she retired : Provided, That in no case shall an annuity in this class exceed $420 per annum. Sec. 3. That for the purpose of this act and subject to the provisions of sec- tion ten hereof the period of service of an employee in the classified civil service shall be computed from original employment, whether as a classified or un- classified employee in the civil service of the United States, and shall include periods of service at different times and services in one or more departments, branches, or independent offices of the Government, and shall, also include service performed under authority of the United States beyond seas or honor- able service in the Army, Navy, or Marine Corps of the United States, either Regular or Volunteer : Provided, That in the case of an employee who is eligible for and elects to receive a pension on account of disability incurred in the line of duty the period of his military or naval service shall not be included for the purpose of assignment to classes defined in section two of this act. It is further provided that in computing length of service for the purposes of this act periods of separation from the service shall be excluded, and that in the case of a substitute city carrier, postal clerk, or railway postal clerk only periods of active occupation in the duties for which he or she was employed shall be included. ' Sec. 4. That the provisions of this act shall inclhde employees of the Library of Congress and the Botanic Gardens, excepting such persons as may be appointed by the President and confirmed by the Senate, and may be extended by Executive order, upon recommendation of the Civil Service Commission, to include any employee or group of employees in the civil service of the United States not classified at the time of the passage of this act. The President shall have power, in his discretion, to exclude from the operation of this act or include therein any employee or group of employees whose tenure of oflBce Is intermittent or of uncertain duration. Sec. 5. That all employees to whom this act applies shall, on arriving at the age of retirement as defined in section one, be automatically separated from the service: Provided, That if not less than ninety days before the arrival of an employee at the age of retirement the head of the department, branch, or inde- pendent ofiice of the Government iij which he or she is employed certifies to the Director of the Bureau of War Risk Insurance that by reason of his or her efiiciency and his or her willingness to remain in the civil service of the United States the continuance of such employee therein would be advantageous to the public service, such employee may be retained for a term not exceeding two years upon certification by the Director of the Bureau of War Risk Insurance, and at the end of the two years he or she may, by similar certification, be con- tinued for an additional term of two years, and so on: Provided, however. That at the end of ten years after this act becomes effective no employee shall be continued in the civil service of the United States beyond the age of retire- ment specified in section one hereof for more than four years. Sec. 6. That each employee who may become eligible for retirement as pro- vided in this act shall, not less than sixty days before reaching the retirement age, file with the Director of the Bureau of War Risk Insurance, in such form as he may prescribe, an. application for ^n annuity, and said application shall be supported by a certificate from the head of the department, branch, or Independent office of the Government in which the applicant has been employed EBTIJEtEMEJSrT, QB' EMPLOYEES IN OLASSII'IED CIVIL SERVICE. 5 Stating the age and peiripd or periods of service of tlie applicant and salary, pay, or 9ompensatio^ received, as shown by tlie official records: Proi;id;ed, hotch. ever, That in the case of an employe? who is to be continued in the service of the United states beyond the retirement age,' as provided in section five of this adt, no application for retirement and annuity as herein prescribed shall be filed with the Directo^- of the Bureau of War Risk Insurance : And provided further. That failure to apply for retirement and annuity within sixty days after reaching the retirement age bepause of the pendency of an application for retention iu the civil service shall, not, be construed to deprive any person of retirement and annuity. .Upon receipt of satisfactory evidence , the Director of the Bureau of War Risk Insurance shall- forthwith adjudicate the claim of the applicant, and, if title to an annuity be established, a proper certificate shall be issued to the annuitant under the seal of the Treasury Department, and such certificate shall become evidence of the right of the annuitant to the annuity as therein defined. Sec. 7. ,That every employee to whom this act applies wlio shall continue in the civil service after the passage of this act, as well as every person to whom this act applies who may hereafter be appointed to a position or place, shall be deemed to consent and agree to the deductions made and provided for herein- after, and payment with such deductions shall be a full and complete discharge and acquittance of all claims and demands whatsoever for all regular services rendered by such person during the period covered by such payment, except his or her claipi for the benefits to wWch he or she may be entitled under the pro- visions of this act, notwithstanding the provisions of sections one hundred and sixty-seven, one hundred and sixty-eight, and one hundred and sixty-nine of the Revised Statutes of the United States, and of any other law, rule, or regular tion affecting the salary, pay, or compensation of any person or persons em- ployed in the civil service to whom this act applies. Sec. 8. That, beginning on the first day of the second month after the month in which this act is approved, there shall be deducted and withheld from the basic salary, pay, or compensation of each person to whom this act applies a sum equal to two and one-half peroentum of such person's basic salary, pay, or compensation. The Secretary of the Treasury shall cause the said deduc- tions to be, withheld from all specific appropriations for the particular salaries or compensation from which the deductions are made and from all allotments out of lump-sum appropriations for payments of sucli salaries or compensa- tion for each fiscal year, and said sums shall be transferred on the books of the Treasury Department to the credit of a special fund to be known as " the civil service retirement .fund," and shall be credited, together with interest thereon at four per centum per annum, compounded annually, to the individual account of the employee from whose salary or compensation the deduction was made. Such " civil service retirement fund " is hereby appropriated for the payment of annuities, refunds, and allowances as provided in this act. There is also appropriated, out of any, moneys in the Treasury not otherwise appro- priatedj a sum which, when added to the dfeductions herein provided and trans- ferred from other appropriations under the provisions of this act, shall be suffi- cient to make payments provided by this; act : Provided, That the Secretary of the Treasury is, hereby authorized and empowered to invest, from time to time, in interest-bearing securities of the United States, such portions of the ■" civil service retirement fund " hereby created as in his judgment may not be imrber diately required for the payment of annuities, refunds, and allowances as herein provided, and the income derived from such investments shall constitute a part of said fund for the purpose of carrying out the provisions of section eleven of this act. ,1 The Secretary of the Treasury is hereby authorized and empowered m car- rying out the provisions of this act to establish special funds supplementing individual contributions by the employees and to receive, invest,, and disburse for such purpose all moneys in the form of donations, gifts, legacies, bequests, or otherwise which may be contributed by private individuals or corpora- tions or organizations for the benefit of the ciyil-seryice employees generally or any special class of employees. Sec. 9 That annuities as herein provided shall be paid monthly, and checks shall be issued and mailed to the last-known address of the annuitant on the first business day of the month succeeding the month in which the annuity, becomes due • Provided, That where an annuitant is laboring under legal disa- bilities the annuity in such cases may be paid to the duly appointed guardian. 6 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. Sec. 10. That upon the transfer of any employee' from unclassified to classified status, or upon the reinstatement of " a former employee to the service, credit for such past service' or for any part thereof shall be granted only upon the payment to tlie Treasurer of the United States, within ninety days of such transfer or reinstatement, of the amount of such deductions with interest as provided in this act as would have been made for the periods of actual service or part thereof for which credit is to be given. Interest shall not be com- puted, however, for periods of separation from' the service. Sec. 11. That in the case of an employee in the classified civil service of the United States v. ho shall be transferred to an unclassified position, and in the case of any employee to whom this act applies who shall become abso- lutely separated from the service before reaching the retirement age the total amount of deductions of salary, pay, or compensation wth accrued interest com- puted at the rate of four per centum per annum compounded annually, shall, upon application, be returned to such employee ; and in event of the death of an employee before he shall have received in annuities an amount equal to the total amount of the deductions from his salai'y or compens.ition together with interest thereon at four per centum per annum compounded annually up to the time of his death, the excess of the said accumulated deductions over the said annuity payments shall be paid in one sum to his or her legal representa- tives upon the establishment of a valid claim therefor. Sec. 12. That for the purpose of administration, except as otherwise pro- vided herein, the Director of the Biireau of War Risk Insurance, under the direction of the Secretary of the Treasury, be, and is hereby, authorized and directed to perform, or cause to be performed, any and all acts and to make such rules and regulations as may be necessary and proper for the purpose of carrying the povisions of this act into full force and efCect. Sec. 13. That payment of annuities, refunds, and allowances as herein pro? vided shall be made by the disbursing clerk for the Bureau of War Risk Insur- ance, and with the approval of the Secretary of the Treasury, checks in pay- ment of annuities may be drawn without separate vouchers or receipts, but in such form as to protect the United States against loss; Provided, That vouchers shall be required in all cases in which payment of annuities, refunds, or allow- ances are to be made to some person other than the annuitant, and in all other cases in which the Secretary of the Treasury may deem it necessary. Sec. 14. That it shall be the duty of the head of each executive department and the head of each independent establishment of the executive branch of the Government not within the jurisdiction of any executive department to report to the Bureau of War Risk Insurance in such manner as said bureau may pre- scribe the name and grade of each employee to whom this act applies In or under said department or establishment who shall be at any time in a nonpay status, and the amount of basic salary, pay, or compensation lost by the em- ployee by reason of such absence. The Bureau of War Risk Insurance shall keep such record of appointments, transfers, changes in grade, separations from the service, and losses of pay as shall enable it at all times to determine accu- rately the amount of salary, pay, or compensation deducted and withheld from any individual under the provisions of this act. Sec. 15. That the Secretary of the Treasury shall prepare and keep all need- ful tables, records, and accounts required for carrying out the provisions of this act, including data showing the mortality experience of the officers and employees in the service and the rate of withdrawal from such service, and any other information that may serve as a guide for future valuations and ad- justments of the plan for the retirement of officers and employees. The Sec- retary of the Treasury shall make a detailed comparative report annually to Congress showing all receipts and disbursements, together with the total num- ber of persons receiving annuities and the amounts paid them. Sec. 16. That none of the moneys mentioned in this act shall be assignable, either in law or equity, or be subject to execution, levy, or attachment, garnish- ment, or other legal process. Sec. 17. That for clerical and other services and all other expenses necessary in carrjnng out the provisions of this act, there is hereby approprintecl the sura of $100,000, out of any moneys in the Treasury not otherwise appropriated, which sum shall be immediately available and continue available until the end of the fiscal year next after the passage of this .ict; thereafter the Secretary of the Treasury shall include in his annual estimate of appropriations a sum sufficient to continue this act in full force and effect. Sec 18. Thrt all laws and parts of laws inconsistent with this act are hereby repealed. KETIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEBVICE. 7 The Chairman. Mr. Keyes, do you wisia to say a word first? STATEMENT OF MR. GEORGE T. KEYES, SECRETARY OF THE NA- TIONAL CIVIL SERVICE REFORM LEAGUE, NEW YORK, N. Y. Mr. Kbtes. Mr. Chairman, Mr. Richard H. Dana, the president of the league, has been studying this problem for a number of years, and he has been devoting a great deal of time to this very important and vital subject, and what he has to say is based upon some experience as well as study. I wanted to start out with the statement — and then will ask Mr. Dana to take it up, and analyze . the bill from his point of view— that we, the' National Civil Service Reform League, heartily favor the retirement J)rinciple; and we ate not obstructionists, and are solely interested in a solution of the problem that will provide for the retirement of our superannuated Government employees, and with that very brief statement, May I present Mr. Dana? The Chairman. Proceed, Mr. Dana. STATEMENT OF MR. RICHARD H. DANA, OF BOSTON, MASS. The Chairman. Mr. Dana, have you made a study of Senate bill 4637? I believe you have. Mr. Dana. Yes. ■ j. The Chairman. And I believe that you desire to be heard in ref- erence to that bill? Mr. Dana. Yes. The Chairman. Will you kindly give us your views, sir ? Mr. Dana. As Mr. Keyes has said, the league is committed to a proper retirement measure. The war emphasizes the need. It is not a simple proposition. It is much more complex than one would at first suppose, in the history of such schemes in the world of busi- ness and in various countries. . Ifi 1911 the league took it up. I was not then president, but i have been on every committee connected with the subject of superannuation, and we have employed, actuarial advice, etc., in calculations, and we have had a study made and made a study ourselves of some of the prominent systems in the world and that have been adopted by business. ^ . .„ ' u t. It seems to me that it would be a great thing if we could have here in the United States Government a wise, actuarially correct and practical system which would be a model to the various pities, States, and Territories of the country, and would be accepted the world over as something unusually fine. ^ ■ uj. In Great Britain they got led into, by accident, adopting a straight pension system. They began by contributions to a common fund. That fund was not credited to each person who paid contributions, but was a big common fund, and they began to put all kinds of extra burdens on the fund that were not intended originally in the scheme as it was laid out, without making the contributions any larger, so that they found themselves in a position where ^this fund ^as not going to be big enough for the various claims that were going to. be made upon it, and something had to be done, and they jumped right into straight pensions. 8 EETIEEMENT OF EMPLOYEES IK CLASSIFIED CIVIL SERVICE. Now, this bill is not for what we are criticising — straight pensions; It is really, roughly, fifty-fifty; partly contrihution and partly straight pension. But I think the experience of Great Britain in straight pension is very important as bearing upon the part of the bill that is straight pension. It was found that it was unsatisfactory to the employees. It was the civil service of Great Britain that made this objection to the straight pension bill, not the taxpayers. In fact, the civil service showed very plainly that the taxpayers are getting •off mighty easy, because in the straight pension it came about inevitably by the ordinary law of demand and supply, that there was an indirect contribution from' their receiving lower pay be- cause there was that pension that was dangled before their attention, which they were to get provided they stayed on in the service to the «nd of the journey, and if they dropped out before the end of the journey they got nothing. That is to saj', if a man lived to 70 years,, he would get a pension, but if he died before, his family would not get anything; or if he resigned before, he would not get anything; and yet he had been making, indirectly, contributions ; and the civil :service proved before a parliamentary committee, and the parliamen- tary committee found it as a matter of fact, that they were making indirect contributions. The employees wanted them to go further and find out how big that was. and to show conclusively, which their ■evidence did, that it was more than it would have cost them to have bought that annuity out of an insurance comjiany, and a great deal more than would have been required if there had been any direct .contribution — contributory system. The committee, failed to make any finding of that because they did not want to be involved in that question. Then they passed some legislation which somewhat corrected that,, and I might just read from President Taft's message, if I may, on this very subject. It is short and to the point (reading) : Careful stucjy of experiments made by foreign Governments shows that three serious objections to the civil pension payable out of the Public Treasury may be brought against it by the taxpayer, the administrative officer, and the civil em- ployee, respectively. A civil pension is bound to become an enormous, continu- ous, and increasing tax on the public exchequer ; it is demoralizing to the serv- ice since it makes difficult the dismissal of incompetent employees after they have partly earned their pension; and it Is disadvantageous to the main body of employees themselves since it is always taken into account in fixing salaries — You know, if you are on the Appropriations Committee, how that is brought up in your minds in fixing salaries — and only the few who survive and remain in the service until pensionable age receive the value of their deferred pay. For this reason, after a. half century of experience under a most liberal pension system, civil servants of England Tsucceeded, about a year ago — This was written in 1911 — In having the system so uiodified us to make it virtually a contributory plan with provision for refund of their theoretical contributions. That is to say, the British Government said that these people had Ijeen receiving lower salaries all their lives, because of this possi- bility of receiving a pension on reaching the age of 70, and they said, " We will give them something," and they still claim that the amount is not anything like what they were entitled to. It was proved that in one case a person considered it a promotion to go from a $1,200 BETIBEMENT OP EMPtOYBES IN CLASSIFIED CIVIL SERVICE. 9 salary without the pension to a $1,000 salary with the pension. That is a contribution of $200 a year, or IT per cent, practically, at fi time when they would get it only in' ease they survived. That kind of payment is perfectly exorbitant, and yet the evidence will show that that is what happened again and agaiii. • Now,, the contrihutory plan in this bill is that the employees will pay something and the Government will eventually, if the employee stays to the retirement age, pay something more^-give a straight pension. ' So far as that half goes — it is not a half, and I do riot be- lieve it is proved conclusively how much it isj it is more than a half: in some cases it is, at all events — that, we feel, has all the dis- advantages to Government efficiency, and to the employees them- selves, that the straight pension system has. That cripples this, you might say, only by .50 per cent, as to efficiency; but I claim that it does so just as much as if it was the whole 100 per cent, because if a man has an equitable claim on his office on the ground that he has contributed something, it is impossible to get rid of him. It is hard enough to discharge an inefficient person from the publio serv- ice, anyhow. Friends spring up everywhere, and they go to the head • of the office, and the head of the office has no pocket nerve. It makes no difference to him or to his success in life; and you gtentlemen know that the easy-going tendency of Government service is to let two men do a one-man Job, so as to' help out an inefficient man. rather than to discharge an inefficient man. That is common knowledge in all governmental service everywhere; the kindheartedness of legislators who pass the laws, and of administrators who have the details in their hands. The Chairman. If it will not interrupt you I will say that this bill provides that where there is separation from the service before retirement, the amount of deduction shall be returned to him. Mr. Dana. Oh, yes; the 50 ]>er cent part. The Chairman. Yes. Mr. Dana. But the other 50 per cent which the Government is going to make up — ^that thing which is dangled before their eyes, to be received if they reach the end of the journey, but not. if they fall back — has some effect. The 50 per cent part which is a straight pen^ sion, that is the part I am talking about. The Chairman. Would not that be valuable, td retain good men in the service? It is something which you might say dangles before the eyes of the employees, but would not that be a wise thing from the governmental standpoint, and from the standpoint of the Gov- ernment efficiency, to obtain better men ? Mr. Dana. There has not been much trouble in retaining men by the ordinary promotion in salaries, who have gotten a good many years of experience. In fact, they are sometimes unfitted somewhat for outside life. They get used to the Government service they are in, they have a knowledge of the office ; and the retirement, as shown by actual count, is much greater among' men in the earlier years of their service, among the younger men; and there the retirement is too great, and the most capable men are the ones who go off, as a rule, as they see business openings here and there; but there is not much i-etirement in later years. That seems to be the experience. That certainly was found so in England. Not only was that found 10 RETIREMENT OE EMPLOYEES IN CLASSIFIED CIVIL SERVICE. SO in official reports and in theory, but I, personally, have tra,veled a good deal in England, and I have sL good many English friends, and among them I had one, a large administrator in the India service — a man .who fills a whole page or a half page in Who is Who in Great Britain— and he said that one of the worst things that happened in that service was that when men got .pretty high, up and had only 10 years more before they reached the retirement age, they often ceased to perform their duties with efficiency, because they did not fear the consequences of such action, they all had this sort of feeling : " You will not dare to remove me. I have been in this service 30 years, and I have only 10 years more in the Government service, and it would be cruel to put me out, and I know you would not do it." That is practically the way it goes. He said, " If we had a system that was wholly contributory, so that a man could take everything he was entitled to and there was nothing left on for him with the passage of the additional years, we could brace that man up by telling him, 'We can get rid of you, because you will have to submit an account at compound interest of all your contri- butions, and that is the whole thing you are entitled to' — if it was a completely contributory plan; and then you could go to others and say ' You have enough to buy a pension. It is not as much as you would get later; but if you are willing to put that at compound in- terest and the return on it, you can do it.' " In so far as this bill provides for the contribution by the Govern- ment of only one-half, so far it is good. Now, I would like to say about that, that the thing which interests civil-service reformers of late years has been efficiency in democracy — I mean reasonable efficiency; I do not mean grinding men up and sifting them out. and that kind of efficiency, but an efficiency of organization, and of a fair amount of work, and one of the things that has interested me is this efficiency, and our program has been enlarged. Our original program emphasized more the corrupting influences of the spoils system on politics and on the Government service itself; and now that is considerably done away with in the United States service, and what we are emphasizing now is efficiency in a democracy — that a democracy could be made, Avith the proper methods adopted, we believe as efficient as an autocracy. Mr. Gainor. Would you kindly elaborate on that? Mr. Dana. Yes ; I will. Now, one of the things is this. (At this point the chairman temporarily left the room.) Mr. Jordan. I would like to have you develop that thought, Mn Dana. Mr. Gainor. Yes. Mr. Dana. I might say that I am talking now of the general principle of a contributory plan; I am not talking about the im- mediate situation. I will differentiate between the two. I am talking about new entrances into the service, and the position to be adopted. Senator Colt. That is rather a broad subject they are going to ask you to explain, as to whether or not a democracy can produce as great efficiency as an autocracy. Even as applied to these civil- service employees, I should not know at first exactly what you meant ' what would be the difference between autocracy and democracy, as applied to employees. You are dealing with a system here, are you not, whether under an autocratic or a democratic government? EETIBiEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. 11 Mr. Dana. Yes; that is the real solution, I think; it is the system. I do not think it depends upon whether it is autocratic or democratic, although many pessimists think it is so. Senator Colt. My idea is that on the surface the difference between autocracy and democracy is that autocracy produces the greatest efficiency, but that so far as reserve power is concerned, it lies in the democracy. Mr. Dana. The reserve power of a democracy is tremendous, and we get ahead, but we do it at an awful expense sometimes. Senator Colt. Yes. (At this point Senator McKellar returned to the room.) Mr. Dana. I was going to say that the two things, if this is going to bring about great efficiency in democracy, are to have good man- agement in your service. Our civil service "originally applied mostly to clerks and stenographers and persons of that sort, and certain assistants, but not to anybody who had the head of a bureau or had any executiye or organizing service and efficiency, and the answer was conclusive that an ordinary written examination could not test organizing ability and efficiency ; but the system lias been tested and carried out with the greatest success in the United States Govern- ment service, it being applied to even positions up as high as $10,000 a year, and filling these positions by throwing aside all written examinations and just making a questionnaire as to the man's edu- cation, training, and achievements in life — what he has done — and then having that questionnaire, after it is all filled out, both by the persons who have employed him and by himself and those who know about his education and training, and what he has done, also investigated and graded througli experts in his own line of busi- ness, by physicians for physicians and by engineers for engineers, and so on; so that they have filled the gi'eat hospitals very suc- cessfully with the best doctors, in Chicago, and some of the biggest hospitals in the world; and the places in libraries have been filled in that way ; and places of chief engineers and heads of road de- partments, and in the United States Government departments, all of its various offices. For instance, under the Agricultural Depart- ment, which has done, some of the best work in the world, the places haye been filled by men who have not had to answer a single scho- lastic question, but have filled out questionnaires showing that they had been educated at such and such an institution, and had done such and such work; and their ability is tested. That seems to work well, and seems to give an enormous advantage. And why? That that is the system that prevails practically in all autocracies or semi- autocracies that have shown efficiency. Senator Colt. That have done what? Mr. Dana. That have shown efficiency. Senator Colt. Yes. Mr. Dana. Take Turkey. Now, Turkey is not much of an autoc- riacy ; but there there has been shown no such efficiency, because they have not had any such system; it is mere favoritism. But in Ger- many and in France nobody can receive, by law, any of these higher offices who has not had the degrees in the universities or has not shown that he is fitted for that kind of work. For work in chemistry he has got to have had such and such degrees in cJiemistry, and as a civil engineer or a sanitary engineer he has got to have had such and 12 BETIKEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. such degrees in those studies showing that he has fitted himself for that work. Men go into the lower grades, and through practical abil- ity and experience fit themselves for the higher position. Now, it is the same in city management. All of the heads of departments are persons who have been promoted from one city to another on account of efficiency. I will not go into that further. But in the service itself, that' can be done through bureaus of efficiency, such as that which you have here in Washington, with Mr. Brown at the head of it; or we think better in many respects to go to the Civil Service Commission themselves for the standard of work. I do not mean to find out hpw many square yards of window glass a person can keep clean or how many yards of street surface he can keep clean, but it can be standardized to a great extent by the employment of efficiency engineers and organizing engineers and business managers to come in and help the departments to get the best results and keep both the individuals and the heads of the groups up to what is a fair standard of work ; and where that has been ti;ied, as in Chicago, it can be carried on in such a way as to give no contest with the labor unions, provided the standardization is fair and it is not done in a way to be what you call " test work " ; that is to say, to get the man who is unusually able to set the standard, but have a fair standard, and keep them up to that, and then have promotion properly done. One of the things that they have got to say is that " this department has too many people in it"; and then they have got to, take those supernumeraries and put them in another department or put them aside, and when vacancies come put them into those vacancies; and they have got to brace people up; and wherever that is done, ever so much more work has been done without fatiguing or tiring any- body. And trying to work along those line, to produce those efficiencies, in the new problems that the business men are finding in hiring and firing in their own departments, using these things in their business, as is constantly being done and as the science is growing rapidly. Now, if you have a new pension system, which makes it harder than ever to get rid of a man so that a man has a claim on his office, if he has been working at a lower salary on account of the 50 per cent, something he is going to get in the end — and he does have a claim, as those English investigations prove, and it is a claim that Congress can not resist if it is brought up 10 or 20 years hence — it is going to be very hard to produce efficiency. It is one of the most discourag- ing things we have to contemplate. We though of changing our name from the National Civil Service League to something else, and as a compromise we made it, and we were going to have a subtitle of Efficiency for Democracy. Senator Colt. Are the general purposes of this bill approved by your society? Mr. Dana. No. The first part of it, the contributory system, pro- vided it was a wisely devised contributory system, we do approve of. Senator Colt. Are you here to oppose the bill ? Mr. Dana. We are here to suggest that the bill should be amended or approved in various ways. Now, I may say that this bill has not been a bill, as I understand it sent out to such experts as Mr. Brown and others, to draw up the best bill possible. KETIKEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEBVIOE. 13 The Chairman. Oh, yes ; it has. You have been misinformed. ; Senator Colt. Are there those here who are going to speak in favor of it?. The Chairman. They have already made their statements. Mr. Jordan. We are here to-day to hear Mr. Dana. Mr. Dana. I would say, if that is so, that I very much hope you will turn it oyer to Mr. Brown and call upon him for a complete statement of his opinion in regard to it. The Chairman. We did turn it over to Mr. Brown, and he turned it over to Dr. Maddrill ; and it must be said in fairness to Dr. Mad- drill that he has since sent to me some additional figures, and this bill js based upon the reports made by the Bureau of Efficiency to this committee. Mr. Dana. But I think, in case these opinions have been given you, that you should — I submit that the committee should — call ini Mr, Brown and other men to say on what basis they have done it. Now, I understand — and I am not going to quote anybody, because "I might misquote them, but I understand on the best authority — that they did not understand that they were to make from whole cloth the best bill that they thought ought to be made for the service, but that they un- derstood they were to take certain ideas which the employees were willing to have accepted and put them into the best shape. Now, 1, am very sure you will find out that that was the way this bill was prepared. The Chairman. I am thoroughly fainiliar with it, and I think I can tell you exactly what was done. Senator Colt. Mr. Chairman, as you know, we have been so busy en important things that, this is the first meeting of this committee I have been able to attend. The , CHAIRMAN. Yes; so that I. will explain how this bill came into being. Senator Colt. I wish you would explain the whole matter. The Chairman. The question was raised as to a plan. There was one plan which provided for contributions entirely by the em- ployees and another one which provided for contributions entirely by the Government. I concluded, after such examination as I made, that a half-and-half plan would probably be the true method of getting at it. I thereupon got Mr. Brown to look into the matter of the figures, what figures we coiild get. He employed Dr. Mad- drill— or Dr. Maddrill was in his employ— and Dr. Maddrill fur- nished me those figures. The greatest difficulty was experienced in regard to the cost. Dr. Maddrill said that this bill, as it is now, would cost 5 per cent of all the salaries. It first figured out, under the provisions of the tentative bill, that it would cost 7 per cent, and we had to raise the age limit in order to bring it down to the 5 per cent, of course. , , n t. j. When we got it in that shape, down to the 5 per cent, we ex- perienced all kinds of difficulty in getting the various employees' associations to agree to half. They first, I think, agreed to 1.5 per cent and then to 2 per cent, and then a number ol the men said they would not go up as high as 2.5 per cent. I still took the position ■ that it was a give-and-take proposition, as many are, and that we oueht tt) go in on a half-and-half basis, and that until they all agreed on a half-and-half basis I- would not introduce the bill.. 14 RETIREMENT OF EMPLOYEES IN CLASSIFIED, CIVIL SERVICE. Mr. Dana. That is right. The Chairman. That when they agreed on a half-and-half basis I would be glad to do it. If I make a mistake in this statement, gentlemen, I want you to say so. Mr. Jordan. It is right. Mr. Gainoe. You are correct. The Chairman. Finally we got the representatives of all the em- ployees to say that they would be willing to the 2.5 per cent, which is one-half of the estimated cost that we got from the Bureau of Efficiency. ' Mr. Dana. That is right. The Chairman. When we got that far I introduced the bill. AhA, by the way, I will say that this matter was gone over, and I want to say for you, too, Senator Colt, that this matter was gone over; in reaching the conclusion I have just mentioned this matter was gone over. No employee made any protest. Many of the representatives of the employees' associations were here. Dr. Maddrill, who fur- nished the figures for the Bureau of Efficiency, was here, and every paragraph of the bill and every section of the bill, and, I believe, almost every word of the bill, has been scrapped over and fought over, criticised and worked out, and we had very elaborate-hearings about it; we took proof about the matter and went over the w'hole thing. The hearings are now in print, and I will be glad, to send you a copy of them, because this is a very interesting situation. The result has been, as I say, that we finally agreed upon this bill; Siiice the agreement upon it. Dr. Maddrill has presented other figures Mr. Dana. That is right. The Chairman (continuing). That he thinks are fairer to all con- cerned, and they have been discussed. Senator Colt. Did those relate to matters of detail? You state that the fundamental matters are agreed upon. ■ The Chairman. The fundamental principle of half and half has been agreed upon. Senator Colt. Does not that conform to Mr. Dana's idea? Mr. Dana. That is new, as I understand it. Mr. Brown was not asked to give what he thought was the fundamental principle of a pension system for all employees, but only, starting with the half- and-half proposition as had been agreed upon, and also a flat rate, which I will speak of in a minute, he has given the best bill that could be brought in. And we employed Mr. Brown years ago to help us Senator Colt. Where do you differ? The Chairman. That is what we would like to know — just where do you differ ? ' : Mr. Dana. We differ first on the point that we think it ought to be all contributory, or if the Government contributes not to con- tribute, as provided in this bill, something away ahead, but if the Government wants to contribute at all let them make a cash paymenls right along and let it go into a common fund and let the men draw from it, so that if they retire they will take it. Senator Colt'. What the Government contributes, too? Mr. Dana. Yes ; what the Government contributes, too. Senator Colt. Is not that very favorable to the employees? Mr. Jordan. We never asked for any such thing. BETIBEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SEBVICE. 15 The Chairman. I do not think you could get that through Con- gress. Mr. Dana, No ; I suppose not. The Chairman. No. Senator Coi/r. If we ask a good deal, we may get more than if we ask little. Mr. Gainor. I agree with you. Senator Colt. I am heiartily in favor of this bill. , Mr, Dana. This practically means a system of bookkeeping. You give a certain part of your pay and the Government doubles it, and it is just the same as if they made your pay that much more and then got you to contribute the whole of it. The Chairman. When you analyze your view of the subject the only difference that I see is this, that you contend that the contribu- tion that the Government gives, the one-half contribution, should at once become the property of the employee. Would not that be put- ting a premium upon their withdrawing after a certain time? Mr, Dana. That is one of the objections to that part of the system. The Chairman. Yes. Mr. Dana. That it would encourage a man withdrawing from the service. ' : . ' The Chairman. As soon as he accumulated a certain amount. Senator Colt. Under ^his bill if a man retires 10 years before he reaches the age limit- does he get anything? The Chairman, He gets all he contributed with 4 per cent interest. Senator Colt. And nothing from the Government ? "The Chairman. But nothing from the Government. On the other hand, if he stays he gets the pension provided in the bill. Mr. Gainor. That is the' inducement provided for him to stay. ■The Chairman. That is an inducement for him to stay, which appeared to us as a rather wise provision. Senator Colt. Now, you will see that if the Government gave its contribution there would not be that inducement for him. Mr. Dana. There would be this situation. Take Dr. Jordan, who is employed in the Treasury Department, and suppose he saves iip $1,000 of his own. With $1,000 of the Government there is $2,000 that he can ^et any time he wants it. Now, suppose some man comes along and wants him to go into a gold mining business and wants to send him out to Washington State, and he says, " If you have as much as $2,000 I will let you come in," and he takes down his $2,000 and goes out there. That is an inducement for him to leave, whereas the other way it would not be that way. That is the way it strikes me. Senator Colt. What is the German system? Does the Govern- ment give its aid? „ , m j^- , j- Mr Dana. I would like to be able to refresh my recollection betore I answer those questions. This hearing came up unexpectedly to me and in vacation time when I was here, and I have a lot of literature on it, and I would not like to speak offhand; but the Canadian and French systems are largely contributory. Let me come back to Mr. Brown. ^ ^. ^ i. Senator Colt. Let me ask you, is there any country that has adopted the system that where a man retires before reaching the age limit he will still have the benefit of the Government's contribution? 16 RETIREMENT OP EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. The Chairman. That is just the question I was going to ask. Mr. Dana. They have adopted this system, that where there is a contribution by the employees his contribution is at compound in- terest The Chairman. That is what this bill provides. Mr. Dana. But only so far as he has contributed. The Chairman. But vhat Senator Colt asks you is, Is there any Government that provides for the withdrawal of what the Gov- ermnent has contributed? Mr. Dana. There have been some business concerns that have done that. The Chairman. Only business concerns? Mr. Dana. There have been. Senator Colt. Are you figuring on that? Mr. Dana. No, sir; I was going to say we have taken that only as a possible consideration, and we have never gotten any committee of the league to agree on that. But so far as a matter of bookkeep- ing is concerned it is the same as if their salary was increased by that amount and they then paid the whole of the contribution. Senator Colt. I understand. Mr. Dana. If a man contributes $6 a month out of his salary and the Government puts in $6 more, and that is a separate account which is to be the basis of his retirement fund with compound interest, it is just the same as if the Government had increased his salary by $6 a month and made him pay the whole $12, so far as bookkeeping is concerned. It has a moral effect aside from all that. But what I wanted to get at is this, that when we employed Mr. Brown to help us in regard to the Episcopal clergy — I have been connected with the Episcopal Church for a long time, and I had a part in that — Mr. Brown there recommended that there should be full contribution of the whole amount of the sum necessary to pur- chase the fund on which the retirement of the clergymen should be made when they became superannuated, and I think he has not changed his mind at all as to what would be best for the employees and for the Government. Mr. Gainor. May I ask what proportion of their salaries the min- isters contribute to that fund? Mr. Dana. In that case it is all paid by the congregation, just as it would be by the Government ; because it was admitted that all clergy- men, with a very few exceptions that you could count on the fingers of your two hands, were underpaid, and they had had for a long time a movement to increase their salaries, and instead of increas- ing their salaries they said that the congregations should pay for their pensions as the best way of increasing their salaries. But the thing is that it is not a. promise by the church that if a man stays on until the retirement age it will pay in part, or in future — at some other time — but the money is paid in and put down at com- pound interest for the whole thing. The Chairman. Would it interrupt you to ask you a few questions about the bill itself? Mr. Dana. No, sir. ■ ■ The Chairman. Have you a copy of the bill before vou ? Mr. Dana. Yes; I have it in my hand. KEHEEMElSrT OP EMPLOYEES IN CLASSIFIED CIVIL SEKVICE. IT The Chairman-. Take the first section; have you any suggestion* to make about the provisions there as to the ages at which they; shall be eligible for retirement? Is 68 the proper age limit? Mr. Dana. I think that is an improvement over 65. As you knoWy the cost of the extra three years is enormous. There have been sev- eral suggestions in the past. One was to make it 70, Vith certain classes of persons, to be designated by the President, who should' retire earJier, persons whose duties in their positions require special physical ability. ' , Mr. Beach. That is incorporated in this bill in the preferential age provision. Mr. Dana. You have it only for certain designations. Mr. Beach. For certain designated classes, The Chairman. Then, generally speaking, the first section would^ be satisfactory? Mr. Dana. Yes. The Chairman. Now, turning ,to section 2 on page 2, have you any suggestions to make in reference to the classes and the periods to be served before determining the amount of the annuity ? Mr. Dana. There are several things there. In the first place, the limit of the annuity I think should be properly graduated. The Chairman. The age ; you mean the amount of it? Mr. Dana. Yes ; it is provided that in Class A the annuity shall not exceed $600 per annum. The Chairman. What would you suggest about that ? Mr. Dana. There is a further amendment that has been suggested by Dr. Maddrill. , '"^^ The Chairman.' Do you approve of tbose amendments ? Mr. Dana. Yes ; I have looked into them. The Chairman. Do you think they are better? Mr. Dana. I think they are a great improvement over this, pro- vided you start with a bill with two provisions which we think are both defective. One is the flat rate, and the other is the 50 per cent contributed by the Government to the end of the journey. The Chairman. Your idea is that the whole thing ought to be borne by the employees ? I understand that is your fundamental idea. Mr. Dana. Yes ; that is the fundamental thing, but also they ought to have their salaries to start with— put on' a fair basis, such as an ordinary man ought to be able to save money out of^ — and then, starting with that, have them contribute. The Chairman. As a man of the world and as a business'man and a practical man you know that we can not have a perfect system to' begin with. If we wait to get a perfect system, we will never get anything started. We must take things as they are. Mr. Dana. Yes. This is not altogether in the kir. , The Chairman. I think it is in the clouds. Mr. Dana. Perhaps it is; but I mean this is part of it, because, part of the whole system that I have been talking about, of putting in efficiency engineers into the service is to standardize work and pay, and in a great many departments you will find in one depart- ment doing the same Mnd of work a wholly .different rate of -pay -is' given from that in another department; and that all wants to be standardized and brought up to what is a fair.^ay in commercial 80909—18 2 18 RETIREMENT OF EMPLOYEES IN" CLASSIFIED CIVIL SERVICE. life for that kind of service; and that is a part of' our program fq^ civil service, and that this Government Bureau of Efficiency is under- taking to do as a part of its job — and that is a thing that is going to be done — ought to be done, and it is not altogether in the air and has never appeared altogether so. The Chairman. You would not want to postpone it Mr. Dana. Oh, no. The Chairman (continuing). Until we secured that ideal system? Mr. Dana. No, of course not. The Chairman. And I want to call your attention to another thing, that such a system as you have suggested would depend, really, on education, the educational feature would come in, and until we have compulsory education and all of our citizens educated in the same way, it would be very hard to adopt a system of that sort. Senator Colt. The question of the standardizing . of the amount of the salaries, which you have stated in such an interesting way, is not that foreign to the purposes of this specific bill ? Mr. Dana. Even as to this specific bill, if they are going to con- tribute something, they ought to have a fair salary out of which to contribute it. Senator Colt. We could not put that in this bill. Mr. Dana. No; but I was simply mentioning it, that as a part of the whole civil service system of the United States we feel that there is going to be that thing done; and it has been done with great success in the city of Chicago — that is what started this — and it has begun in the city of New York, and it is producing good result.s. There have been some of the most comic things you ever saw. There was a case where a man got $1,800 a year as a health expert, and it turned out he did not know how to read or write; he just squeezed, a sort of disinfectant around here and there. But his title to recognition politically was such that when it came up in the council chamber he got this very high salary for doing really nothing. That is the sort of thing you find ; and an efficient worker is not paid half as much as he ought to be paid, and that is being done in many places. Salaries should be put on a better basis, and Congress ought to come forward and do what is right, as they are doing in many of these cases now, and especially under war conditions. But now I really think that you will find Mr. Brown does not believe either in what is called the flat-rate assessment or contribution fromthe employees, if it was left to him to decide, nor in a method that is only partially contributory. The Chairman. It was not left to Mr. Brown nor to Dr. Mad- drill — both of whom are most accomplished gentlemen — to decide,. What we wanted from them was figures, and they have very kindly' furnished us those figures, and Congress is going to try to de- cide it. Mr. Dana. Of course Congress is going to decide it. It is one of those matters for Congress to decide. Senator Colt. What do you mean by " a flat rate " ; paying so much a month? Mr. Dana. No, sir. I will tell you ; everybody pays 2.5 per cent, regardless of age. The Chairman. Regardless of age? Mr. Dana. Regardless of age. EETIBEMENT OF EMPLOYEES IN OLASSIPIEO CrSHCL SEEVICE. 1.9 The Chairman. What other plan would you suggest? Mr. Dana. One of the bills .which has been drawn in the past and presented to Congress provided that the Secretary of the Treas- ury should have tables prepared ; at a certain age, 1 per cent ; at a certain other age, 2 per cent; and so on. We have had this prepared by an actuary, and he shows us this peculiar result, that a person who enters the service at the age of 20 and has 48 years in the service, by paying 2.5 per cent pays 88 per cent of the benefit he is going to get, asnd the Government, provided he serves until the retiring age, only giyes him 12 per cent. On the other hand, a person who goes into the service at 40 only pays the Government 40 per cent of his benefit and gets from the Government 60 per cent. So the man entering at 40 pa,ys less than one-half ai much as the man who enters at 20, and the Government pays him five times as much benefit. Mr. Gainoe. May I ask you a question there ? Mr. IDana. And that is perfectly plain. Now, there was no dif- ficulty in the other. I am talking now about persons who originally enter the service. There is another scheme which is to be separated. Take those who are already in the service, This is to be treated as an entirely separate plan. Senator Colt. If the employee dies, does his family get the benefit? , Mr- Dana. The benefit of the contributions he has made. The Secretary of the Treasury has tables prepared, according to which a person of 20 pays so much and a person of 3D only so much. Senator Colt. If you go to put a complicated table of that kind mto the bill, we will never get anything through in the world. The Chairman. That is what I say. Mr. Dana. The original bill does not give anything. It says it is a matter of actuarial calculation. It simply says that the Secretary of the Treasury will prepare tables for the computation of the amount t9 be paid by the employee. • The Chairman. Let me put this, now, and see what you have to say to it: For 20 years, to my personal knowledge, every effort has been made to pass and put into operation and effect a law pro- viding for a retirement system. Mr. Dana. Yes. The Chairman. You say you are in favor of a retirement system. Mr. Dana. Yes. The Chairman. We have got one in this bill which may not be perfect, but we have got substantial agreement on the part of the various employees to it. It is a half-and-half proposition that is easily understood, that is fair, if you say the system is fair at all; a^nd while there may be inequalities in it such as you have suggested, do you not think that it would be wiser and better to put this system in effect and then afterwards, if there are inequalities in it, have those inequalities ironed out? If we attempt to get a bill in that will plpase you and will please him. and will please him [indicating other gentlemen present] we will never get anywhere. Now, you say that you ^approve of half of this, anyway. Would it not be better for us all to get a system enacted and then after- wards iron out the inequalities? That is so in every law that Con- 20 BETIKEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. Mr. Dana. Almost every law that you pass here is later amended. But may I ask you to consider this" thing? Has there ever been a case where they have changed a pension measure, except to give an increased benefit to the employee? Has there ever been one where they have made an additional contribution to the employee? And is there not a fundamental difficulty in changing a bill — say, if it is half contributory, and the employees begin to suspect, perhaps, that that is not right— is there not a fundamental difficulty m changing it into a wholly contributory one? What will a man say? "I entered this service under a pension system as passed by law." Of course, constitutionally you have a right to amend that law, but as a matter of practice it is going to be very difficult. He will say, "I had a sort of moral contract with you, and now you want an addi- tional contribution." The Chairman.. Is it not true — and did you not testify a while ago — that the English system, which is wholly contributory by the Government, is displeasing to the employees, and that they have asked that it be amended? Mr. Dana. Yes ; but not in the way of making a. direct contribu- tion. They have come to a sort of a compromise, in that the Gov- ernment gives to the families of those who die within the retirement age, or who retire under suitable and proper conditions only, a certain sum of money. The amount they get is not anything like the indirect contribution they have been paying, but it is something. It is a sop to Cerberus ; that is what it is ; and it is not putting the English system on a sound basis. Senator Colt. You believe in the half and half, do you not ? Mr. Dana. No. ' Senator Colt. Do you believe in the pension system entirely? , Mr. Dana. I believe in the contributory pension system with a separate account, so that it is not a common fund except as money in a savings bank is a common fund, in that each man has a savings book with the Government showing so much paid down each time and so much due. Senator Colt. You believe in the contributory system ? Mr. Dana. Yes. Senator Colt. That is, in a compulsory savings system? Mr. Dana. A compulsory savings system. That, as Mr. Brown stated to us— and I believe he would say the same to-day if you asked him — a sound method is this, by which each man is going to have his account properly adjusted. This is going to compel him to save for his own sake and for the Government's sake, so that the Govern- ment will not have a penniless old man on its hands who has not been saving. Mr. Jordan. But if it is admittedly inadequate, how will you over- come the difficulty of saddling upon the employee the entire con- tribution? You are familiar with this fact, that for many years there was determined opposition on the part of a certain class of employees of the Government to any form of contribution. Mr. Dana. Yes. Mr. Jordan (continuing). As Senator McKellar has indicated in his remarks, we have now come to where we are agreed upon the fundamental principles of this bill. In regard to the Government's RETIEEMENT OF EMPLOYEES IN CLASSIFIED, CIVIL SERVICE. 21 contribution, we agreed that it would be better not to return to the employee what the Government contributed, because it might have the eftect of inducing the employee to continue his employment, ^ciently, if you please, until he reached the age of retirement. Ihere may be some merit in your argument that the Government should give what it contributed to the employee, without interest, but we do not believe that Congress is now in that frame of mind where It would approve a scheme of that kind. But we on our presr ent salaries are willing to assist the Government in creating our own annuities. . This bill has some inequalities. We admit that. _ Mr. Dana. Is it not a pretty long question I am being asked? Is It not rather an argument, than a question, on the other side of the matter ? I would like to say one thing, because this has been brought out both by the chairman and in the last question, and that is that this is some inducement to keep people on in the service. As a matter of fact it is no inducement to a man at the age of 20 to say " I want to stay on in the service, and otherwise I will go out." For a man of 20 entering the service to look ahead 48 years and calculate on receiving the benefit of the pension on retirement, it is too far. He does not think of that. Eesignations of those men will be just about the same. I think they have assumed that that is so in the criticism of this bill. The actual statistics regarding resignations show that there are mighty few resignations as you get on later in life, except those that come from breaking down in health. A man in the service stays on. Senator Colt. May I say just a word? I have been very much in favor of this general scheme and plan, and the way I would ap- proach it is this : What is satisfactory to the employees ? I would make it just a practical question of what is satisfactory to the em- ployees ? Mr. Jordan. That is this bill, Senator. Senator Colt. If they are willing to contribute half and the Gov- ernment contribute half, that would strike the ordinary mind with- out going into details — and there are complicated details to work out — that would strike the average man as being fair. I want to satisfy the employees, and I do not care a continental about any theory about it. Mr. Dana. Yes. I think it would be a more permanent satisfac- tion to them to have this. Senator Colt.' But I would not state to them what you have stated to them, that if one gOes in at the age of 20 they will be paying 80 to 90 per cent. I would keep that back. If they are willing to do that, well and good. That same inequality you are speaking of enters into life insurance, where a man lives to the end. Mr. Dana. Yes ; but when you are younger you pay less than the other man instead of more. Suppose that when you went in at 20 you had to pay as much as a man of 40 ? Senator Colt. Why not, if they are satisfied that half and half pays the bill, give them half and half, and then amend your law wlien you find the defects in it? 22 EETIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. Mr. Jordan. We think it is fair. Mr. Gain OR. We think it is a splendid, thing. Mr. Dana. May I suggest to you the history of this? At the very beginning there were a set of employees who had studied this ques- tion very thoroughly, and they had a committee, and they agreed to the contributory plan as best. Then that excited opposition imme- diately among people who had not studied into it so much, and they 'opposed that and wanted a direct pension and fought for a direct pension, and the thing was delayed for years because they wanted a direct pension. I know some employees who have studied the ques- tion very thoroughly who still believe, even for themselves, provided they have a proper salary, that the whole contributory system is the best. The Chairman. I know ; that may be true ; but with the thing we have got now, while there may be differences of opinion on the part of employees, 'we have got the majority of all of them to agree to this particular system, and we stand in a solid phalanx when we go before Congress — ^and we expect to report this bill out in a few days, Senator Colt, with your help — and we have got in behind this sys- tem which the majority of us believe fair. It seems to me that every man who is interested in a civil-service retirement bill, though this may not meet with his approval abso- lutely, could well get behind a system with the great majority. Mr. Dana. May I make one more suggestion? President Taft had an efficiency commission appointed who took this matter up and went into it at that time scientifically, and had hearings of employees and employers, of the heads of the Government, and of business men, and they had people of every sort before them, and Profs. Willoughby and Goodenough were on that commission, and they are both here, accessible, and I wish this Committee could hear them. The Chairman. I think we have heard them. We have held the most elaborate hearings. Mr. Dana. With the employees. The Chairman. Oh, no ; we have had Govermnent officials. We held these hearings a year ago, and I do not know whether these two professors you name were there or not, but we have had every kind of opinion before us. Senator Colt. How long has this committee had this before it? Mr. Jordan. A year and a half. The hearings started last August. The Chairman. We have held hearings and have gotten figures,, and we have gotten our own efficiency bureau to examine into it, and as I understand, the material thing with me a,lways was this : Would the 5 per cent secure the annuities provided by this bill, and we have been assured by the efficiency bureau that it will; and having gotten that far along, it looks to me like it is inevitable that the only thing for the friends of retirement to do is to pass this bill. Mr. Dana. Those gentlemen have not been heard. The Chairman. We will hear them if they desire to be heard. Senator Colt. When did you propose to report the bill ? The Chairman. Within the next few days. I have seen every member of the committee, and I do not believe there is a dissenting voice. Senator Colt was out of the city when -we went over it before. Senator Colt. Yes. EETIEEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 2B th^nin^^^™^^^' ^^ ^^^ ^^^"^ emphatically spoken his mind this Senator Colt. I was so in favor of the bill that t did not think I cared to hear anything on it. The Chairman. Every member of the committee has said that, aAd we were m hopes that the Civil Service Retirement League would take that view of it; that if there are inequalities in it they would Undertake to get those ironed out later instead of delaying indefi- nitely; and it we waited to get what you would call a perfect meas- ure, that IS what would have to be done. Mr. Dana. Oh, yes; certainly. The Chairman. We know in practical life Mr. Dana. There is nothing perfect. The Chairman (continuing). There is nothing perfect, and we have got to iron out those things later, and I sincerely wish we could have the indorsement of your organization. , Senator Colt. Why not take up that bill section by section and state m a few words just what you object to and what modifications you suggest? , Mr. Dana. Our objections are really fundamental rather than in detail. Senator Colt. Then I would like to "understand you, because I can not, quite. Mr. Dana. Yes. Senator Colt. You believe in the contributory system, do you not? Mr. Dana. Yes. Senator Colt. But you do not believe in the half and half? Mr. Dana. Yes. Senator Colt. There is where you differ from this bill? Mr. Dana. Yes; and also the flat contribution of 2.5 per cent, regardless of age, I believe will bring this down ■ Senator Colt. Would you believe in more contribution than this bill calls for or less? Mr. Dana. More contribution. Senator Colt. More contribution on the part of the employees? Mr. Dana. Yes. Senator Colt. Well, there I would differ. Mr. Jordan. We can not stand any more with our present salaries. Senator Colt. Yes. Now, you have studied this question 50 hours , where I have one second, and I would not for a, moment put my opinion before yours in matters of detail; but, as Senator McKellar has said, these questions of legislation are matters of compromise when it comes to what you can actually do. They are not what we hope to do. We hope to carry ,out these great American ideas ih this sad world, and we will try; but, practically, can we? Now, here is this situation. You have got an agreement, and you have got all these employees so that they are willing to the half and half. There would not be anything, I believe, that would induce them to go beyond that. Let us give them a bill that is satisfactory. It has now reached a stage, after hearing, where they feel that something ought to be done. I have letters in regard to this every day. There is rank injustice in the present situation, so far as these old people are con- cerned, when we are doing so much for so many others — ^military 24 BETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. men — you know." They are also serving the Government. And if you talk of Germany and her efficiency, it is her method and her efficiency in taking care of her people, and her good faith, aiid her strong hold on her people is because she has always protected her workmen. When a man's work failed, if he was able to work and could not get work the Government gave him work and paid him ftnyway ; and the devotion of the people to the Hohenzollerns to-day is due to the fact that they have put all the people on a reasonable living basis. That is what makes the strength of that autocracy to-day. I believe with Lloyd George that if there is anything good in Germany we should take it, we should adopt it. Mr. Dana. Now, as to the details, .and" the criticism of the bill, if you assume that this bill ought to go through in this shape the sug- gestions that have been made from the Bureau of Efficiency, I think, involve a great improvement in details, in ironing out things that are incorrect, and will partially remove and remedy conditions objected to; and as they have got those things in and are willing to support them I will not take up your time on that. Dr. Maddrill has come to explain those figures, and he will give them to you in better detail than I would, and I can look them over, and I think we can approve them on this bill right straight through without affecting fundamen- tals ; and all • I can say is that if by any chance the bill should not pass in this session I hope we can have a plan of campaign that will get the employees back where their original committee was and where we think we have got a better system both for them and for the Government. That is all I can say. The Chairman. We are very much obliged to you for coming down. We are glad to have heard you. Will you giA'e us the names of those two gentlemen you wanted heard ? Mr. Dana. Prof. W. W. Willoughby is director of research, and Prof. Frank J. Goodenough is of Johns Hopkins University. The Chairman. 'We will now hear Dr. Maddrill. STATEMENT OF DR. J. D. MADDRILL, ACTUARY, UNITED STATES BUREAU OF EFFICIENCY. Mr. Maddrill. A number of references were made to-day to sug- gestions of the Bureau of Efficiency intended to smooth out irregu- larities existing in the bill. It is a 'fact that this ilat-rate assessment plan, as Mr. Dana has said, is not anywhere accepted as an actuarially sound method of accounting or casting up the equities as between the buyer and the provider of the benefits. So the first suggestion made in this proposed amended form of the bill, which I understand you desire to have printed. Senator The Chairman. Yes. Mr. Maddrill (continuing). Is that that flat rate be applied as far as it goes to purchase value received for value given. The first part of the annuity, as provided for in this proposed plan, is just the annuity purchased by the actual 2.5 per cent deductions made irom the individual's salary. As the Government receives a benefit from the retirement of the superannuated employee, a second part of the annuity is proposed to be furnished at a flat rate, depending upon the number of years of EETIKEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 25 service of the employee, which is computed to be equal when cast over the entire group of beneficiaries, to about 50-5G. The amount of thkt flat contribution would have to be, in order to fulfill that re- quirement, about $6 for each year of service. A maximum of 30 years was put upon the service period to be so rewarded; with the thought that the Government would have no point in urging the continuance of an employee after 30 good years of service. A third part of the annuity is proposed on this ground, that at the passage of the bill the employees in the service will have had no opportunity to make contributions, and if the annuity were to consist oiily of the first two parts just mentioned the employee in the service would get a very inadequate benefit. So it is proposed to add to the annuity a third part, made up of $6 for each year of service prior to the bill becoming effective. Perhaps $12 would have been wiser here in this third part. In normal times $6 would have worked out more equitably as between employees making and not making deduc- tions. But these are not normal times, and $12 will not more than meet absolute need. The Chairman. Doctor, let me ask you this: The present plan which provides that one^half is to be paid by the employee and re- turned if he leaves the service; that is fair to him, T should think, regardless of whether he paid 1 per cent or whether he paid even 2.5 per cent, so that there is no inequity on that, as to, those who leaVe the service, is there? Mr. Maddrill. I am glad of an opportunity to speak on that point. Mr. Dana's suggestion that the entire cost -be paid by the employee is predicated upon the assumption that the employee is receiving an adequate salary, and that then, if he retires at any time, his entire contribution can be returned to him with interest, and; the deal will be exactly equitable. There has been great objection raised to the deferring of a benefit, on the ground that in some way there is bound to be a reduction in the amount of salary received because of the fact that a benefit is later to be received by the employee, provided he lives long enough to get it. Mr. Dana's suggestion to eliminate that whole argument against deferred pay requires that the entire contribution be made by the employee, and that at his separa- tion he shall get back his entire equity. Mr. Jordan. You do not mean equity ; you mean his entire con- tribution with the interest added, do you not? Mr. Maddeill. That is what I meant by his equity. The Chairman. Doctor, you do not feel that there is any doubt about 6 per cent being sufficient to pay the annuities provided for in this bill, ,do you ? ... Mr. Maddrill. Five per cent will cover the annuity as provided in the proposed plan. , Mr. Jordan. But not in this one? Mr. Maddrill. It will be five and a fraction in this one. The Chairman. I thought you stated before that 5 per cent would cover it. Mr. Maddrill. My statement was that the 5 j5er cent would come within a few tenths of 1 per cent. Mr. Jordan. It can be referred to still as a 5 per cent bill. Mr. Maddrill. It can be referred to still as a 5 per cent bilJ 26 KETIBEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SEKVIOE. The Chairman. Is it not perfectly apparent that with men wh© have been in the service 40 years, or like one lady who spoke to me, who I think told me she had been in the service 53 years - Mr. Beach. There are some in the^ pension service who have been in service' over 50 years. The Chairman (continuing). And with others just coming into the service, 20 and 21 years of age, is it not evident that it is per- fectly impossible to get a system that will work satisfactory at all? Mr. Maddrill. I believe "it is. Let me state, as iny creed on this matter, that I believe that the individual should receive an adequate salary, and that having received an adequate salary, he should pro- vide entirely for his old age. • The Chairman. That is true, but we have here a condition and not a theory which confronts us. Mr. Maddrill. With that in view, I recommended a changed form of the bill for the earn&st consideration of your committee, and if you see fit, for presentation to the Senate — to, Congress. The Chairman. From such examination as I have been able to give to the amended proposition, as suggested by you, it introduces many complications that it will be very hard for the legislative mind to understand. In other words, it will take an expert explanation, and it is going" to be very difficult to get that into the legislative mind under any circumstances. The present bill is absolutely so simple that anybody can understand it. Here the employees are going to contribute half and the Government is going to contribute half, and the pensions provided are fairly equitable. At any rate, all of the employees are willing to contribute on this system that they understand themselves; it has perfectly plain terms; thej' know ex- actly what they are going to get. It does not take . an expert to explain what they are going to contribute and it does not take an expert to explain what they are going to get. They can look at the terms of the bill and see what they are going to get and they can look at the terms of the bill and know exactly what they are going to contribute. Why is not that the best system in the world under the particular conditions that confront us? Mr. Maddrill. May I suggest this, that there are several defects in the bill, wliich I have pointed out. that seem to me to be fatal? One of them is this The Chairman. Now, you have changed your mind about this, Doctor, have you not, since you testified about it in the beginning ? Mr. Maddrill. No, Senator. The Chairman. Because, as I understood, when you brought us the last figures on it before its introduction you believed, that this bill was a very fair measure, looked at from the half-and-half basis, and one that was practical and that Congress might well pass. Now, why have you changed your views about it? Mr. Maddrill. May I. respectfully say, Mr. Chairman, that my views have not chang d ? The Chairman. Yes. Mr. Maddrill. My relation to the bill has changed somewhat. It seems to me now that I am put in the position of one who really is made responsible for proposed economic provisions which I could not feel that I would like to be sponsor for. One of them, for example, RETIEEMENr OF EMPLOYEES IN CLASSIFIED CIVlL SERVICE. 27 is^ this : Aft^r my suggestions were made with regard to the bill the $50 maximum deduction was struck out, against my protest. That struck me as absolutely unfair to the employees— not, of course, of the lower salaries, but of the highfef salaries. The bill as now printed proposes to take from the higher-paid employee twice what he Would pay to an insurance company which receives the expenses of doing its business and a profit. The Chairman. If he is willing to do that, why should outsiders, complain ? Mr. Maddrill. I doubt, Mr. Chairman, from my observation and from what has come to me, if he is willing. The Chairman. I beg to take issue with you. Doctor. They have sent their representatives here, who all say they are in favor of it; and I believe I have gotten one letter — there may have been two, but I think only one letter — that disapproves of the bill. I will say that since this bill has been published it has been given ^ wide distribution ; the print has been exhausted, and we have had to have new editions of it printed and sent out, and I have applica- tions for it at all times, and I get many letters about it, all of which have been of approval except one from some gentleman here in, the city, whose name I do not now recall, who disapproves of it on a number of grounds ; and practically all of- them approve of it re- gardless of how much they contribute and how much they do not; and here are all their representatives here who are approving it, and these representatives would not approve it unless the men behind them did approve it. Mr. Jordan. That is right. The Chairman. We know that from actual experience ; and I am not going to approve anything here for these people unless they are behind it. Mr. Maddrill. Mr. Chairman, may I question whether the em- ployees of the salaries above $2,000 have really had this brought to their attention ? The representatives here, I think it should be stated in justice to themselves and to my former statement, are voicing the attitude of the employees who are not receiving the higher salaries. The Chairman. Now, the argument that you made, that it does bear a little harder on the higher-salaried employees, and therefore works an inequity, is to my mind the strongest argument in its favor. I have always believed that those of us who are a little better off should contribute a little more to the Government in the way of taxes. Mr. Etan. If I may be permitted right now, is it not also true that there is the absolute guaranty in the bill that every 5-cent piece that anybody contributes goes back to the contributors or their legal heirs ? The Chairman. That is true. Mr. Maddrill. Let me say this: That when the higher-paid em- ployee makes his contribution he does not do it to the benefit of the lower-paid employee. The Chairman. To whose benefit is it ? I do not see how it could benefit anybody else. If it does not benefit the higher-paid em- ployees, I do not see how it could possibly benefit anybody else ex- cept the lower-paid employees. 28 BETIREMENT OP EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. The time has come when I must go over to the Senate. I will tell you, Doctor, if you want to be heard further on this I will be glad to hear you. Mr. Maddeill. I do want to be heard further. Let me close with this statement to-day : That I believe the chances of passage of the bill would be very much improved if you gentlemen would seriously consider it in the form in which it has been presented by me, after it has been analyzed by the experts of Mr. Dana. Mr. Alcorn. After Dr. Maddrill has submitted what he wants to submit here, I would like to be heard. RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. friday, september 13, 1918. United States Senai'e, Committee on Civil Service and Eeteenchment, Washington, D. C. The comfnittee met at 11 o'clock a. m., Senator Kenneth D. Mc- Kellar presiding. Present: Senator McKellar (chairman). The conimittee resumed the consideration of the bill (S. 4637) for the retirement of employees in the classified civil service. The Chairman. We vcill now hear Dr. Maddrill. STATEMENT OF DR. JAMES D. MADDRILL— Resumed. The Chairman. Dr. Maddrill, I vrant to ask you if you have made a report ; and if so, will you make it a part of these proceedings and mark it "Exhibit A"? Dr. Maddrill. I have made such a repprt and I herewith file the introductory text of it as Exhibit A. (The report referred to is here printed in the record, as follows:) Exhibit A. ' ACTUAKIAL KEPOKT OF THE UNITED STATES BUREAU OF EFFICIENCY. The earliest computations were made on a form of the bill not actuarially drawn, which placed the ages of eligibility for retirement at 62 and 65, and Included a provision for retirement in the event of disability at any earlier age. At the boundaries of four defined service classes, pronounced changes were to be made in the amount of pension to be granted. The amounts of pension were to range up to half the salary, but not to exceed $600. The de- ductions from salary were not to exceed 2 per cent. Upon the showing that the proposed deductions would meet but about one- quarter of the cost, the representatives of the employees, after informal con- ferences with Senator McKellar, proposed that the deductions to be withheld from the salaries be fixed at 2 per cent. As it was the view of Senator McKellar, chairman of the committee, that the benefit accruing to the Government by the retirement of the superannuated may be considered abont equal to that accruing to the employees retired, he agreed to present the bill if it could be so modified that its total cost in the case of new employees would be 5 per cent, or very nearly 5 per cent, of the salaries. - It was shown that dropping the disability provision altogether and increasing the proposed ages of eligibility by three years — that is, to 65 and 68 respec- tively — would very nearly result in the prescribed equal distribution of the cost between the Government and the employees. These changes were made in the bill (S. 4637) as it was presented on June 3, 1918, in the Senate by Senator McKellar and in the House by Representative Keating. 30 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. There was added the provision that in no event should the entire return to the employee, in the form of annuities, or in one sum in case of nis with- drawal prior to eligibility age, be less than the total of the deductions with- held from his salary, accumulated at 4 per cent compound interest up to the time of his -separation from any cause. This feature had the effect of increas- ing the total cost of the bill by about three-tenths of 1 per cent of the salary. In its earliest form the plan provided rather wisely, as the bill stood, that ■ the deductions should in no case exceed $50. This limitation should not haVe been removed. Without it, employees of higher salaries would be required to contribute amounts in same cases twice as great as insurance carriers charge for the same benefits. This excessive charge, contrary to the intention of those who recommended the removal of the limitation, does not benefit employees of lower salaries. It simply is overcharged during the service period of the em- ployee, to be returned to him or to his estate later with interest. In too high a proportion of cases this would be merely compulsory insurance. The actuary has hesitated to propose changes in the underlying principles of the bill and has been mindful that it was the function of the Bureau of- Efliciency rather to calculate the relative cost of such bills as were referred to it than to propose modifications of the economics of the bills. Believing that with adequate scales of compensation it is proper to expect every man to pro- vide for his own future, and desiring to call attention to the fact that the old suspicion of " deferred pay " is bound to attach to any plan proposing that the receipt of the Government's contribution be contingent upon the employees' attaining eligibility age, he, nevertheless, feels it his duty to adhere to the fundamentals of the bill laid before him, but would consider his obligations only partly fulfilled if he were to fall to suggest such adjustments within the plan as appear to him highly desirable and in several cases necessary. A plan may be said to be actuarially sound if it provides that the employee shall in any event receive the full value of his contributions, c).nd if, on conserva- tive statistical bases, the Government is guaranteed against supplying deficits rising out of promises of greater benefits than can be purchased in the long run by the contributions that are made for the purpose of supplying the funds. It is strongly felt, however, that a more intimate relation should be established between the employee's contribution and the part of the benefit that it is to purchase. So far as this relationship is set up, exact equity exists as between employees, for they get back, in this respect, precisely what is their own. The same sense of equity pi'orapts the thought that the Government's contribution, so gauged as in the Aggregate to provide half the cost of pensions, might be made on some flat basis, probably, irrespective of salary and determined by length of faithful service rendered. Dr. Maddeill. I have therefore brought to you, Senator, the form of the proposed bill which you sent to me, with modifications which I believe to be necessary. (The bill and summary is here printed in full, as follows:) A BILL For the retirement of employees in the classified civil service. Be it eiuwtecl by the Senate .and House of Representatives of the United States of America in Congress assembled, That, beginning on the first day of July, nineteen hundred and nineteen. nU 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 fifteen years of service, computed as prescribed in section four of this act, and reached the age of sixty-eight years shall be eligible fur retirement on an annuity as provided in section three hereof: Provided, That the age of eligibility for retirement of city and rural letter carriers, railway postal clerks, and mechanics in any branch of the civil service shall be sixty-five years: Provided further. That postmasters shall not be in- cluded in the provisions of this act. A person shall be deemed to have attained the age of eligibility for retirement at the expiration of the date preceding the anniversary of the birth of such person. That the provisions of this act shall include employees of the Library of Congress and the Botanic Gardens, excepting such persons as may be appointed by the President and confirmed by the Senate, and may be extended by Execu- tive Order, upon recommendation of the Civil Service Commission, to Include any employee or group of employees in the civil service of the United States not RETIREMENT OF. EMPLOYEES IN CLASSIFIED OIVIL SERVICE. 31 classiflecl at the time of the passage of this act. The President shall have power, in .his discretion, to exclude from the operation of this act or include therein any employee or group of employees whose tenure of office is intermittent or of uncertain duration. Sec. 2. That, beginning on the first day of July, nineteen hundred and hine- teen, there shall be deducted and withheld from each payment of salary, pay, or compensation, exclusive of bonuses, of each person to whom this act applies a sum equal to two and one-half per centum thereof. The Secretary of the Treas- ury shall cause the said deductions to be withheld from all specific, appropria- tions for the particular salaries or compensation from which the deductions are made and from all allotments out of lump-sum appropriations for payments of such salaries or compensation for each fiscal year, and said sums shall be trans- ferred on the books of the Treasury Department to the credit of a special fund to be known as the Civil Service Retirement Fund, and shall be credited together' with interest thereon at four per centum per annum, compounded annually, to the individual account of the employee from whose salary, pay, or compensa- tion the deduction was made. Sec. 3. That every employee who shall be retired under the provisions of this act shall during the remainder of his or her life receive from the civil-service retirement fund and the moneys hereinafter appropriated from the Treasury: (a) The annuity which the sum credited to his or her individual account upon actual retirement purchases at the eligibility age, sixty-five or sixty-eight as the case may be, on the basis of such annuity tables as the Secretary of the Treasury may prescribe. ( 6 ) A sum of spe annually for each completed year of his or her entire service not in excess of thirty years. (c) An additional sum of $6 annually for each completed year, if any, of service rendered prior to July first,- nineteen hundred and nijieteen. For the month in which the employee may have become separated from the service, no annuity shall be paid. Thereafter the payment of the annuity shall depend upon the conditions existing on the first day of the month in which the annuity shall accrue, and if the former employee receiving such annuity shall die prior to the last day of the month, one full month's annuity shall be paid for the month In which such employee shall have died. The disburse- ment of such last-named annuity and any check payable to a former employee who may have died prior to receiving the amount thereof, shall be made to such person or persons and In such manner as may be prescribed by regulations to be made by the Secretary of the Treasury. Sec. 4. That for the purpose of this a:ct and subject to the provisions of section eight hereof the period of service of an employee in the classified civil service shall be computed from original employment, whether as a classified or unclassi- fied employee in the civil service of the United States, and shall include periods of service at dlfCerent times and services in one or more departments, branches, or Independent offices of the Government, and shall also include service per- formed under authority of the United States in any capacity, civil, military, or naval overseas and honorable, service in a military or naval capacity in the Army, Navy, Coast Guard, or Marine Corps of the United States, either regular or volunteer overseas or in the United States: It is further expressly pro- vided that amounts of pension or compensation which under existing law have or shall have become payable on account of injury received in the service of the Government, military, naval, or civil, shall be deemed to be payable not for service rendered but for injury received and shall not, except as required by existing law, be deducted from the amounts of pension provided under this - act. It is further provided that in- computing length of service for the purposes of this act periods of separation from the service shall be excluded, and that in the case of a substitute city carrier, postal clerk, or railway postal clerk, only periods of active occupation in the duties for wliich he or she was employed shall be included. Sec. 5. J['hat all employees to whom this act applies shall, on arriving at the age of retirement as defined In section one, be automatically separated from the service; Provided, That if not less than ninety days before the arrival of an employee at the period of retirement the head of the department, branch, or independent office of the Government in which he or she is employed certifies to the Director of the Bureau of War Risk Insurance that by reason of his or her efficiency and his or her willingness to remain in the civil service of the United 32 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEEVIOB. States the continuance of such employee therein would be advantageous to the public service, such employee may be retained for a terra not exceeding two years, upon certification by the Director of the Bureau of War Risk Insurance, such certiflct.te to be issued not less than seventy days before the arrival of thfe employee at the period of retirement ; and at the* end of the two years he or she may, by similar certification, be continued for an additional term of t^vo years, and so on: Prufided, however. That from and after January first, nineteen hundred thirty, no employee in the civil service of the United States who may at that time, or may at any time thereafter, have remained in the civil service of tlie United States for more than four years beyond the age of eligibil- ity for retirement specified in section one hereof, shall be continued in the civil service of the United States. , Sec. 6. That each employee who may become eligible for retirement as pro- vided in this act shall, not less than fifty days before arrival at the period of retirement, file with the Director of the Bureau of War Risk Insurance, in such form as he may prescribe, an application, for an annuity. An tipplication for i-etirement and annuity made after tin application for retention in the civil service shall not be construed as a waiver of the applica- tion for such retention. Upon receipt of /satisfactory evidence, the Director of the Bureau of War Risk Insurance shall forthwith adjudicate the claim of the applicant, and, if right to an annuity be established, a proper certificate shall be issued to the annuitant under the seal of the Treasury Department, and such certificate shall become evidence of the right of the annuitant to the annuity as therein defined. Sec. 7. That every employee to whom this act applies who shall continue in the classified civil service after the passage of this act, as well as every person to whom this act applies who may hereafter be appointed to a position or place, shall be deemed to consent and agree to the deductions made and pro- vided for herein, and payment with such deductions shall be a fuU and com- plete discharge and acquittance of all claims and demands whatsoever for all regular services rendered by such person during the period covered by such payment, except his or her claim for the benefits to which he or she may be entitled under the provisions of this act, notwithstanding the provisions of sections one hundred sixty-seven, one hundred sixty-eight, and one hundred sixty-nine of the Revised Statutes of the United States, and of any other law, rule, or regulation affecting the salary, pay, or compensation of any person or persons employed In the civil service to whom this act applies. Sec. 8. That upon the transfer of any employee from unclassified to classified status, or upon the reinstatement of a former employee to the service, credit for such past service or for any part thereof shall be granted only upon the payment to the Treasurer of the United States, within ninety days of such transfer or reinstatement, of the amount of such deductions with interest as provided in this act as would have been made for the periods of actual service or parts thereof for which credit is to be given. Interest shall not be com- puted, however, for periods of separation from the service. Sec. 9. That in the case of an employee in the classified civil service of the .United States ,who shall be transferred to an unclassified position, and in the case of an employee to whom this act applies who shall become absolutely separated from the service before reaching the retirement age the total amount of deductions of salary, pay, or compensation with accrued interest computed at the rate of four per centum per annum compounded annually, shall, upon ' application, be returned to such employee ; and in the event of the death of an employee before he or she shall have received in annuities an amount equal to the total amount of the deductions from his or her salary, pay, or compensa- tion, together with interest computed annually on the unreturned balance thereof at four per centum per annum compounded annually up to the time of his or her death, the amount of the said unreturned balance shall be disbursed to such person or persons and in such manner as may be fixed by regulations to be prescribed by the Secretary of the Treasury. Sec. 10. There is hereby appropriated, out of any moneys in the Treasury not otherwise appropriated, a sum which, when added to the deductions herein provided and transferred from other appropriations under the provisions of this act, shall be sufficient to make payments provided by this act • Provided That the Secretary of the Treasury is hereby authorized and empowered to' invest, from time to time, in interest-bearing securities of the United States such portions of the Civil Service Retirement Fund, hereby created as in his judgment may not be immediately required for the pavment of 'annuities EBTIEEMENT OP EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 33 refunds, and allowances as herein provided, and the Income derived from such Investments shall constitute a part of said fund for the purpose of carrying out the provisions of section nine of this act.. The Secretary of the Treasury is hei'eby authorized and enipawered in carry- ing out the provisions of this act to establish special funds supplementing indi- vidual contributions by the employees and to receive, invest, and disburse for such purpose all moneys in tJie form of donations, gifts, legacies, bequests, or otherwise, which may be contributed by private individuals or corporations or organizations for the benefit of the civil-service employees generally or any special class of employees. Sec. 11. That for the purpose of administration, except as otherwise provided herein, the Director of the Bureau of War Risk Insura'nce, under the direction of the Secretary of the Treasury, be, and is hereby, authorized and directed to perform, or cause to be performed, any and all acts and to make such rules and regulations as may be necessary and proper for the purpose of carrying the provisions of this act into full force and effect. Sec. 12. That payment of annuities, refunds, and allowances as herein pro- vided shall be made by the disbursing clerk for the Bureau of War Risk In- surance, and with the approval of the Secretary of the Treasury, checks in payment of annuities may be drawn without separate vouchers or receipts, but in such form as to protect the United States against loss: Provided, That vouchers shall be required in all cases in which. payments of annuities, refunds, or allowances are to be made to any person or persons other than the annui- tants, and in all other cases in which the Secretary of the Treasury may deem it necessary. Sec. 13. That annuities as lierein provided shall be paid monthly, and checks shall be issued and mailed to the last known address of the annuitant on the first business day of the month succeeding the month in which the annuity be^ comes due: Provided, That where an annuitant is laboring under legal disa- bilities the annuity in such cases may be paid to the duly appointed guardian. Sec. 14. That it shall be the duty of the head of each executive department and the head of each independent establishment of the executive branch of the Government not within the jurisdiction of any executive department to report to the Bureau of War Risk Insurance in such manner as said bureau may prescribe, the name and grade of each employee to whom this act applies in or under said department or establishment who shall be at any time in a nonpay status, and the amount of salary, pay, or compensation lost by the employee by reason of such absence. The Bureau of War Risk Insurance shall keep such record of appointments, transfers, changes in grade, separations from the service, and losses of pay as shall enable it at all times to determine accurately the amount of salary, pay, or compensation deducted and withheld from any individual under the provisions of this act. Sec. 15. That the Secretary of the Treasury shall prepare and keep all need- ful tables, records, and accounts required for carrying out the provisions of this act, including data sho\\Ting the mortality experience of the officers and employees in the service and the rates of withdrawal from such service, and any other information that may serve as a guide for future valuations and adjustments of the plan for the retirement of officers and employees. The Secretary of the Treasury shall make a detailed comparative report annually to the Congress showing all receipts and disbursements, together with the total number of persons receiving annuities and the amounts paid them. Sec 16 That none of the moneys mentioned in this act shall.be assignable, either in law or equi'ty, or be subject to execution, levy, or attachment, garnish- ment, or other legal process ; but- they shall be liable for the payment of any tax or obligation owing the United States incurred through any breach of duty arising in the course of his or her employment with the United States by the employee from whose salary, pay, or compensation such deductions shall have been made, or on whose account such annuity may have accrued. Sec 17 That for clerical and other services and all other expenses neces- sarv in carrying out the provisions of this act, there is hereby appropriated the sum of $100,000, Out of any moneys in the Treasury not otherwise ap- propriated, which sum shall be immediately available and continue available until the end of the fiscal year next after the passage of this act ; thereafter the Secretary of the Treasury shall include in his annual estimates of appro- priations a sum sufficient to continue this act in full force and efEect. Sec. 18. That all laws and parts of laws inconsistent with this act are hereby repealed. 80909—18 3 34 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. SUSCMARY OF PROVISIONS OF KETIREMKNT BILI,. Section 1. Classiflerl civil employees covered. Postmasters excluded. Library of Congress and Botanic Garden employees included, except presidential. Ex- ecutive order may cover in employees not now classified. President may ex- clude or Include employees of intermittent or uncertain tenure. Eligibility for retirement: Service at least l-j years. Age 65 for mechanics, city and rural letter carriers, raihvav postal clerks. Asje 68 for others. Section 2. Deductions, 2i per cent of pay. Withheld from salary appropria- tions. Transferred on Treasury books to Civil Service Retirement Fund. Credited to lndi\ idual account at 4 per cent compound Interest. Section 3. Life pension provided: (1) Annuity purchased by deductions. (2) Six dollars for each year of service, not- exceeding 30 years. (3) Six dollars for each year of service prior to effective date of bill. Section 4. All United States Government service counted (subject to sec- tion 8 deduction adjustment if necessary). Military or naval service counted. Compensation for injury received in service of United States conserved to employee. Periods of separation not counted. The substitute postal employees covered credited with only periods of active employment. Section 5. Successive two-year continuances. Upon certification by head of department or branch, at least 90 days prior, of efficiency ; and approval by director of Bureau of War liisk Insurance at least 70 days prior. From and after January 1, 1930, absolute age limits 69 and 72. Section 6. Application for annuity unless retained under section 5. Made to Director Bureau of War Risk Insurance, at least 50 days prior to retirement. Treasury Departjnent certificate as to right to annuity. Section 7. Continuance or employment deemed consent to deductions. Return of deductions and payment of pensions to be full acquittance of claims for service. Section 8. Deductions at interest to be made up for credit desired for service for which deductions had not been made. Section 9. Total return to employee or legal representatives in no case less than total deductions accumulated at 4 per cent interest. Section 10. Appropriation of amounts sufficient to make payments provided by act. Secretary of the Treasury to invest funds not immediately payable, In- cluding any donations received. Section 11. Administration by Director Bureau of War Risk Insurance. Section 12. Payments made by disbursing clerk for Bureau of War Risk In- surance in such form as to protect United States against loss. Section 13. Annuities payable monthly. Section 14. Records of appointments, transfers, separations, nonpay periods, and pay thus lost to employee. Head department or branch to report. Direc- tor Bureau of War Risk Insurance to record. Section 15. Secretary of Treasury to keep all other needful tables and records for future valuations or adjustments. To report annually to the Congress on condition of the fund. Section 16. Moneys not assignable or attachable. Section 17. Appropriations for clerical and other services : $100,000 first year, then such sums as necessary. Section 18. Repeal of inconsistent law. The Chairman. Doctor, I have asked you for figures as to the cost of what is known as the McKellar bill, S. 4637. Will you file those figures as to the cost and make that Exhibit B ? Dr. Maddeill. I herewith set out the figures referred to a^ Exhibit B. BETIBBMEBrT OF EMPLOYEES IN CLASSIFIED CIVIL SEEVICE. 35 M t4 Ed I i s o S S E; P3 1 gsS S ago < fnS^ o c> o o <-i '^ -cS £9 W) « gas B— S-aee^Assgofe ° o o « .t: S .! ;5 o, J ft» oo>t-iO"*com (O ec ■* t* o i« 00 00 en C4 ua t> CO U3 e4 >o CO ffi 00 CO o 00t^CD-*eO COM CO i> (D ui CO eo l^^ Hi O CO "* i-» lO to «tf 1-1 oomc4r-4C U3 mm m r rH»iJiOO0>OO.-i i-ri-ri-ri-j" ^-i i-* i-h <*<{.»!H OMCO««'eDt-Ot dodoad>; 3 ^. d nt , 4A 3 3 s~— .fea *^ & en t^ONOOt-CQt-C* noic6eQ*4*u3md 5coeo-5r •a'ln . Cr- (M I-- N t^ ca t*: P ^ (M M CO CO ■«' ■^ oeiec«Di>co"5^ d«c4wco^sDg dwrfc3i>^OT-co C4 « t^moi 00 o eq d'd d rH e4 w p6 ** mot com coot^ d 'H « ci CO -^ •0' ^ o> t* 10 ■* CO CO «0 Q t^ 10 "* W -^i i-H 0» 35 « O ■<»< « o>r»^ (Oira-* coco eo tp «? o I*- O CO 1-Hco^ i-ioi mo coo CO coo LOCO oJoodiri'** coipB O"3O^c0N00m t-imcotv ■>*f- coco CO^^OO-^OOQOO eoeoi^f-iraiNOJCS ■QifSm-4«-«}OJ030>0> O ^pj '3 S S P omoooifsStQ m<4<<^eocoff4Cs<-4 oooooopM 5 o nd ■ 1 I fe c d '^ CO ^i 52 S3 OOiOOOOCOt»-'«'»-l e>imcooi«;^S5e 36 RETIBEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. The Chairman. Dr. Maddrill, have you made a statement as to the estimated receipts in the form of deductions from employees' sal- aries, for the first six years, and the disbursements upon withdrawals prior to pension age, the pensions, and guaranteed returns to pen- sioners, and the differences in these figures; and if so, will you file the same as Exhibit C to this hearing? Dr. Maddrill. I herewith file a statement along those lines. (The statement referred to is here printed in full, as follows:) BxHiBiT O. — Estimated excess of amount of deductions over the amount paid upon withdrawal and as pensions and guaranteed returns to pensioners. [MoKellar-Keating bill (S. 4637, H. B. 12352).] Fiscal year ending July 1. Eeceiptss in the form of deductions. Drsbursempnts upon with- drava's prior to pension age. Pensi-ns and guarant-ed returns to pensioners. Excess. 1920 $9,000,000 9,400,000 9,500,000 9,600,000 9,700,000 9,770,000 $400,000 865,000 1,340,000 1,840,000 2,360,000 2,910,000 $1,7'2,000 1,972,000 2.154,000 2; 400, 000 2,589,000 2,778,000 $6,900,000 6,550,000 6,000,000 5,350,000 4,750,000 4,100,000 1921 1922 1923 1924 1925 The amounts of pensions and guaranteed returns to pensioners can be computed for tlie first few years with fair confidence, for the reason that the portion of the service which they cover is probably not much affected by the present abnormal conditions. These payments are to be made not only from the Civil Service Retirement Fund but also from public moneys. On the other hand, the amounts of the deductions to be received, following the passage of the bill, from the employees now in the servli.'ie are just as indeterminate as the present size of the service it*,jlf. While the Bureau of Efficiency, in the course of other investigations, has been called upon to estimate the size of the present service, and has, perhaps,, received as au- thentic information as can be furnished, the numbers assumed to be now in the service must be deemed conjectural. The amounts of deductions received and of disbursements upon withdrawals prior to pension age must, therefore, be taken as more or less uncertain approximations. It seems hardly necessary to point out that the differences in the last column are not an index to the solvency of the scheme. They have no actual significance. The amounts in the first column are received to pay definite pensions mostly in the distant future, though they may, like savings deposits, be withdrawn from the account earlier. The amounts in the third column are combined costs to the Government and to the employee. The Chaucman. From these figures on Exhibit A, I notice that the percentage is a little more than 5 per cent. Generally speaking,' ao you think that 5 per cent of the salaries of the civil-service employees will pay for this system ? Mr. Maddriijl. Five per cent will very nearly cover the cost of this proposed bill as shown by these figures. The Chairman. I now call your attention to Exhibit C, in which I notice that within the first six years the aggregate amounts re- ceived from the employees are very considerably in excess of the amount to be paid out in pensions and guaranteed returns to the annuitants, and to be paid out upon withdrawals prior to the pen- sion age. Will you kindly explain this ? Mr. Maddrill. The statement made following the table in Exhibit C practically covers, these points. Senator. There I have endeavored : to make it clear that the receipts in the form of deductions greatly exceed the. jotoss J>avmenta ta be made during the first few years of RETlEEMEl^-T OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 37 the system. When all the employees at present in the service have retired the figures will show receipts and disbursements verv nearlv equal. , ■'■■'. The Chairman. In other words, Dr. Maddrill, as I understand you, while for the first few years the aggregate ainount received from the employees will very considerably exceed the amount paid out by the Government, still, as t"he years go by and the system continues in force, the amount that the Government pays will increase until the two. will be about equal ? Mr. Maddbill! That is true. I might add one thing more. This statement would be almost exactly true if no growth were to take place in the service, but a^s it is natural to assume that the service will always grow, the payments made in the form of deductions be- ing made by the employees for benefits to be received by them many years hence will for that reason rather exceed payments paid out by the Government. The Chairman. Some criticism has been suggested, that inasmuch Jas the United States Government now needs all its funds to carry on the war, it would not be wise to institute this system, which will cost the Government money, while the war is going on. As I understand these figures, instead of the Government having to pay out any money for the retirement system for the next few years, it will actually re- ceive more money from the employees during the next few years than it will pay out in retirement pensions ; is that correct ? Mr. Maddrii^. Of course, you understand that the moneys paid in by the employees actually belong to them, and accordingly, during the first few years of the system they could be regarded as a loan by the employees to the Government. In other words, the funds paid in by the employees are trust funds in the hands of the Government. The Chairman. Dr. Maddrill, have you made a statement of fig- ures in reference to this cost, and, if so, will you submit it for the record and mark it Exhibit D ? Mr. Maddrill. I have made figures showing the calculation of the cost the first years of pensions and guarantees, and will mark the same Exhibit D and submit it herewith. (The matter referred to is here printed in full, as follows:) Exhibit D. — Cost of pensions and guarantees. [MoKellar-Keating bill (S. 4637, H. R. 12352).] iRetiring July 1, 1919 (assuming bill will become effective then). Retiring annually thereafter. Fiscal year ending July 1- 1,344 me- chanics, Carriers, and rail- way postal clerks, 3,232 Others. 4,576 civil employees. Mechanics, carriers, etc. Others. Civil em- ployees. Combined cost by years. Num- ber. Cost. Num- ber. Tost. Num- ber. Cost. 1920. 1921 1922 1923 1924 1925 192B 1927 1928 1929 $649,200. 510,000 471, 100 432,600 394,700 375,600 321,500 286,800 253,800 222,500 $1,183,300 1,081,000 980,700 883,300 790,000 700,000 614,500 534,500 480,000 391,400 $1,732,500 1,591,000 1,451,800 1,315,900 1,184,700 1,075,600 936,000 821,300 713,800 613,900 $1,732,000 331 340 349 358 367 376 386 396 406 $137, 100 226,900 388,900 503,100 608,700 710,200 807,600 901,000 990,100 581 605 630 ,657 684 712 742 773 805 $243, 800 475,300 695,400 901,200 1,093,500 1,273,400 1,448,500 1,618,800 1,784,500 912 945 979 1,015 1,051 1,088 1,128 1,169 1,211 $380,900 702,200 1,084,300 1,404,300 1,702,200 1,983,600 2,256,100 2,519,800 2,774,600 1,972,000 2,154,000 2,400,000 2,589,000 2,778,000 2,920,000 3,077,000 3,234,000 3,388,000 38 BETIBEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. The CiiAiiiMAN. Have you prepared any statement as to the present size and the probable future growth of the service, and if so, will you submit it as Exhibit E for the record ? _ • Mr. Mai>drill. I submit such a statement herewith, as Exhibit E. Exhibit E. — Statistics of " Permanent " employees in the Civil Service of the United States. Branch of service. Number in service July 1,1918. Average , age. Average length of service (years). Average ' basic salary. All Postal City carriers Postal clerks Bailway postalclerks. . Rural carriers Others In District of Columbia Male Female... Elsewhere Male... Female Of these, mechanics 263,152 139,070 34,300 43,050 18,749 42,971 124,082 33,511 24,322 9,189 90,571 84,805 5,766 22,822 39.9 39.3 40.9 36.7 38.9 40.8 40.6 41.8 41.9 41.5 40.1 40; 3 36.8 39.8 10.3 10.6 11.9 10.7 12.6 8.6 10.0 13.2 13.1 13.4 8.8 8.9 6.7 9.7 $1,131 1,172 1,U5 1,134 1,379 1,164 1,100 1,184 1,318 829 1,069 1,095 684 1,105 The foregoing statistics apply only to bona fide Government civilian employees the character of whose employment might properly be considered as permanent. Temporary employees, and those rendering only part-time or seasonal service, or whose appointments are for definite periods of less than a year, or until the completion of particular constructional jobs, etc., have been excluded. These numbered approximately 250,000 in 1916. To the regular service of postal employees shown in tlie table must be added an average substitute service of about two years in the case of city carriers, and about one year in the case of postal clerks or railway postal clerks. The local navy yard, like the local post office, is treated asjiart of the general service and has been included under " Elsewhere " rather than " In the District of Columbia." The decennial censuses indicate a popidation growth of alxnit 2 per cent annu- ally. In the five-.\eai' period just preceding .Tuly 1, 1916, the growtli of the Postal Service was about 2.7 per cent per annum, and of the other branches about 4.2 per cent, an aggregate of about 3.4 per cent annually. The abnormal growth during the five yeai-s was no doubt partly induced by the European war, which was on progress two of the five years, but was probably as much or more a reflection of the increased goveriunental activity of recent years. State and municipal as well as Federal, which has been quite independent of war, and is likely to go on for some years to come. It must be noted, however, that the assumption of a higher year-in and year-out i-ate than that of the population, 2 per cent, would be equivalent to assuming that eventually the entire population would find itself in the Government employ. Prom all ttie evidence at band, it seems reasonable to expect the Postal Service to coiiti)iue to grow at a fairly constant rate of about, 2 per cent annu- ally, and that in the other permanent classes the yearly increases which now appear to be not far from 10 per cent can hardly continue at such a rate longer than 1920, whether the war goes on or not. On this assumption, there would be about 180 000 permanent employees other than postal in the civil service in' 1920. Without the abnormal influence of the war, this figure could hardly have hen reached before 1930, and it is surely conservatively high to assume that a figure of 180.000 reached in 1920 \\ill be maintained without Increase or de- crease until 1930, and will then go on increasing at a normal constant rate of 2 per cent. The table appended shows the estimated size of the permanent service at different periods according to these assumptions : aETIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SEBVICE. 39 Postal. Other. All perma- Year. Annual increase. Number. Annual increase. Number. nent employees.- 1911 Pw cent. 2.7 2.0 2.0 2.0 2.0 2.0 2.0 121,522 139,070 141,900 144,700 , 147,600 150,500 183,000 215,000 Per emt. 4.2 10.0 10.0 10.0 10.0 0;0 2.0 100,776 124,082 136,300 150,000 165,000 182,000 182,000 210,000 222,298 1916 1 263,152 278,400 1917 1918 294,700 1919 302,600 332,500 1920 1930.. 365,000 1840 ^5,000 Mr. Maddrill. The figures at the close of Exhibit E are, of course, speculative. The estimated receipts and disbursements in the first two columns of Exhibit C were based on these figures and on the observed separation rates. The Chairman. You have submitted some proposed amendments to the bill, which provide for payments differing somewhat froin those provided for in the McKellar-Keating bill. Have you a state- ment and figures that you wish to submit in connection with your proposed amended bill? If you have such a statement and the fig- ures that go with it I would be very glad if you would submit such matter as you wish to go into this record in connection with that, so that the committee and the Senate may have the same before them. Mr. Maddrill. I have such a statement, which I will file as Ex- hibit No. 1. Also I submit other statements, which I have marked Exhibits No. 2, No. 3, and No. 4. (The papers referred to are here printed in full, as follows:) Exhibit No. 1. Memorandum iti re suggested, changes in the McKcllar-KeaMng bill presented to Congress June 3, 1918. for the retirement of classified civil employees. (S. 4637. H. K. 12352.) Section 1: The date substituted presumes passage of the bill a reasonable time pFior to 90 days before .July 1, 1919. It can be adjusted here and else- where In the bill, if necessary,' at passage. One hundred and twenty days should intervene, as section 5 requires the employees to make application for retention at least 90 days before arrival at retirement status. Minimum service of 15 years, as well as attainment of specified age, is re- %he exfstff Sre^siou "provided: Provided" is avoided in the proposed phraseology. The term "mechanics" is more clearly shown to refer not only to mechanics in the Postal Service. A definition of age is interpolated Old section 4 is brought into its logical place as a second paragraph of ^^Secfiou 2 is old section 8 adapted and brought into its logical place from the •'''s"c?fon'3"Vh''e'moS'bii;^ the original, is devised to cost 5 per cent ultimately the Government paying half and the employees half, every employee new or ofd paying 2i per cent out of each salary check received after the bill eoJs mto effect ll undertakes to grade the benefits more evenly and more equita- hlfas between employees, providing a gradual increase in the annuity payable in Ueu 42i. 47J (3) Explai S60 657 717 584 latory. S30 624 654 554 508 180 30 718 748 584 A !568 B 568 Bin 522 (1) 495 (2) 180 19J ?3 A : ::': : 675 B 675 Bill 554 OTHER PERMANENT CIVIL EMPLOYEES THAN MECHANICS, CITY AND RURAL CAHHIERS, RAILWAY POSTAL CLERKS. (Eligible at 68, assumed to retire at 70.) Years' deduc- tions to age 70. Plan. Annual amount of the average pension to be received from retirement (at ago 70)— Age (I) on July 1, 1919, I, by those in service July 1, 1919, with or (II) at later entry. 40 30 20 15 10 5^ II, by new entrants. years of past service on July 1, 1919. 2i 7J 12i fl) . . Explanatory. Own purchase. S6 a year to S180. $6 prior to July 1, 1919. Sum, (3) .It S6. Sum if (3) at 812.' Exis'ing liill. (2) $180 240 420 660 496 12 180 240 432 672 514 42 ISO 240 462 702 534 76 180 240 496 736 633 $180 ISO 360 .540 420 10 180 ISO 370 550 4.54 37 180 180 397 577 478 74 180 180 434 614 514 121 180 *120 120 240 360 2,57 9 135 120 264 384 290 32 165 120 317 437 378 65 180 120 365 486 454 107 190 90 180 .270 212 8 105 90 203 293 232 30 135 90 255 345 290 59 165 90 314 404 378 99 70 (3) B'.'.'.'.'.'.y.'.'.'.'.'.'.'..'. Bill (1) (21 671 3 A B Bill' (1) S28 105 60 193 253 232 55 135 60 250 310 290 91 165 (2) 62} (3) A B Bill (1) $50 105 30 185 215 232 85 135 (2) 57i (3) A.;;;:;;;;::;::;:: B Bill ri) . S83 (2 180 ISO 105 KEXIBEMENT OF EMPLOYEES IS CLASSIFIED CIVIL SBBVICE. 43 OTHER PERMANENT CIVIL EMPLOYEES THAN MECHANICS, CITY AND RURAL LETTER CARRIERS, RAILWAY POSTAL CLERKS— Continued. Age (I) on July 1, 1919, entry. Years deduc- tions to age 67. Plan. Annual amount of the average pension to bo received from retirement (at ago 67}— I, by those in service July 1, 1919, with 40 30 20 15 10 5 n,by new entrants. year&ofpaat service July 1, 1919.. ^ S2i m 22i 27i 3^ 37i 42i 47i (31. $180 481. 661 534 172 180 180 532 712 333 $120 407 527 478 164 180 120 464 584 514 233 180 120 533 653 531 301 180 120 601 721 533 $90 369 459 454 152 180 90 422 512 478 222 180 90 492 582 514 302 180 90 572 662 534 380- 180 SO 650 740 533 Explanatory. $60 S30 x^::::::::: ::: : 316 376 378 140 180 60 380 440 454 204 180 60 444 504 478 287 180 60 527 587 514 381 180 60 621 681 534 488 180 60 708 768 533 250 280 290 129 165 30 324 354 378 187 180 30 397 427 454 263 180 30 473 503 478 361 180 30 571 601 514 469 180 30 679 709 534 559 180 30 769 799 533 $18S B 188 Bill 233 (1) 132 25. 135 m 3). 29? B 257 Bill 290 (1) 172 (21 165. 42i \i{ 337 B 337 Bill 378 (11 238 (21 180 S7i }i{ A lis B 418 Bill ... . 454 rii 324' « 1 186 3ZJ f"-.:::::::'.:::: 504 B 504 Bill 478 (A\ 435 >2 : 180 27J f 615 B • -,' 615 5U f^\ 550 \U .-" 180 m \i\ f> 738 739 534 44 fiETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. .1 Pi fi K t = p. s s M •A -tl ^ fj w n « M r^ 1=1 III average total per cent cost, unier ultimate separation rates n X (O 0.02 0.10 0.46 0.47' 0.84 1.03 0.34 1.48 ■* Total cost — as per cent of (5)— of hfe pension (9) from a.ge (3), in- dividual's contribu- tions being guaranteed in any case (14)-f2.50. i-T 3. .50 3.60 3,70 4.08 4.50 4.95 5.25 5.57 Cost to Govern- ment as per cent of iniivid- ual's salary (5) of life pension of (9) follow- ing (guar- anteed) re- turn of in- dividual's contribu- tion (9)X(13) >n g 1.00 1.10 1.20 1.58 2.00 2.45 2.75 3.07 Dis- counted value now of hfe annuity of 1 per annum begin- ning at the cni of the nth year from now\ CO 2.641 2.790 3.063 3.419 3.844 4.218 4.423 ^ a (M 7.63- 7.31 6,75 6.07 5.33 4.72 4.40 Annuity of 1 per an- num for n years at 4 per cent inter- est compounded aimually. 03 . --; 03^'-' g 6.460 6.231 5.811 5.298 4.714' 4.224 3.956 2 ■§|x s o' 6.578 6.345 5,917 5.395 4.800 4; 301 4.028 •3 .§ 3 Total pension (7)-l-(8). sr (4)XS6 paid by Govern- ment for each year of service, up to 30 years. CO 00 CO OO 00 00 CD CO Oi "ca i s Annuity pur- chased at age 65 for me- chanics, etc., anl at age 70 for others. t~ tmu& a 1 § g 2iper cent of average total salary. CD 84,927 4,283 3,361 2,579 1^939 1,415 1,015 653 Average total sal- ar.y from entry to retire- ment, accumu- lated at 4 "per cent. lO $197,096 171,324 134,451 103,176 77,578 56,614 40, 608 26, 120. .2 A s s a o o i t a X Retiring- .2 1 -*< 50 or over 45 up to 50 40 up to 45 35 up to 40 30 up ta-35.... 25 up to 30.... 20 up to 25 15 up to 20 At as- sumed aver- age age— CO t~ r^ t^ r~ t^ t^ t^ OS O Age (last birthday) at entry. ?»■ Unlerl7.. 17 to 21 ... . 22 to 26.... 27 to 31.... 32 to 36.... 37 to 41.... 42 to 46.... 47 to 53.... Ex- pected percent- tribu- tion of adher- ents with retire- ment i 3 0.6 2.9 12.3 11.6 18.7 20.8 6.5 26.6 o s Oi (D GO 2 <» r;! Er S SSSSiSF^ScS a o-oooooo*-^ Tl« rn M PJ fcl d sssg^sss ; tA cocococotr^ico ; < H r/j O P4 < Oi O C5 •* OS CO CD Oi O rH 1-t i-l r-4 (N (N CM A HH < M M^SM^Mt; O 'A (M««H 55""-" ^ O \ ^ •A A fc u tO"■00OT 8888888888 88S88SS88S CO QO^O rt T-l O i-t "3 •-* "3- TllrH^^ 46 betiebme:nt of employees in classified civil sebvice. Exhibit No. 4. — Eslimated excess of amount of deduction over the amount paid upon withdrawal and as pensions and guaranteed return to pensioners. [Proposed amended form of McKellar-Keatlng bill.] ' Receipts in the form of deductions. Disburse- ments upon witli- drawals prior to pension age. Pensions and guaran- teed returns to pen- sioners. Excess. friscal year ending July 1— $9,000,000 9,400,000 9.500,000 9:600,000 9,700,000 9,770,000 $400,000 865,000 1,340,000 1,840,000 2,360,000 2,910,000 $1,501,. 300 1,683,600 1,851,900 2,007,400 2,149,300 2,286,200 $7,100,000 1921 6,850,000 1922 ; 6,300,000 1923 5,750,000 1924 5,200,000 1925 4,550,000 The Chairman. Have you the statistics upon which the figures given by you to the committee have been based, and if so, will you file them at this point in the record ? Mr. Maddrill. I have them, and present them, with brief state- ments in explanation. (The matter referred to is here printed in full, as follows:) EETIKEMENT OF EMPLOYEES IN CiLASSHTIED CIVIL SEKVICE. 47 t-a> t»^ •neS «^ ■^ira oioo 0O« O OiOO &s oo CCO> OM CON 00 CH OQO cn o) too ■*OJ CON CON OOi Mr- 00 CO N Ol 00 O (D-^ r-lN NO) t-.-« «3i-l N i-H .-lO N-* ON N« MO> tooo r-r- ®« Ma 0400 ooc OOa 00 f>-t OOM t-i-H UtJrt 00 ^ 00 o ■n oi COU3 IU3 48 BETIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. S-o o p-id <^ ^ o "S -?3 &=J ft»o o ««•««« o in t^ (NO ^S 53 1 w M S| "S "§ &SS ^ o S| *K ■o y-g .-T ^" M «« ^ ^S 2 c^ fiM M -* COM ^8 ;;$ s - O OM MM in »o ^g ft I::- 001^ COO -^o ^■^ ^"ii s w » n » t>i >. C3 ft ft p. OT O 00 ® w <» 1^ i^ i^ qCM^J ^(li< o^-^ t2 S S 1 13 s B NO O +J ftO Sp- «» to to o I^CD O h s g o inoi +3 ^55 &s M »o M ^-S «5 o •^ 2 S^ &^ MrM «* U5 ai CO V > o oo -2 o Pco M3 5< 2 g (2 o §1 • a| Sm ■""s w CA M m ■ 00 to >OCO to IC e»o Kgg 513 t^Oi COO ss o coos "IS °s MOi t^Ol +J -9« ..M ..W ft U3 M M OO lO t> £S mo -^o ^ r^> >% >, tA tA >. P3 03 s S ^ ^ ^''\ BETIBEMBNT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 49 -lO ,- 03^ OOO CO i-l "»JH oo »oo «ocq C0C3 eoi~< .-HO NOO oo OOl OCO too ciJi-T i-T^ ' i-T 00 a> O OS tP OS cooo moo C0<0 to M OO) r-o io«o coco 00 i-H c5r- oo r- Sw OON 33" -, ll- 1^ . a BD as a sp as ay- a " sg §2 og §2 §2 S£ ;fU^ oFLH!*-HTj<0 ■» CS ua lo ■* »o CO ^ 00 o co O CO cSwCq CM « CM .-( r-l rH g Oi-(CMC005CMi0i0OCDi-(t-«0tDt~e0e0Cp i-it-t— «D5DrO(Oi-ii.N«^HeDt-^'3<'^OrtO i-i CM ^ CM 1-1 c^ iH CM CM i-( rH eq Oit^wOmcooicMoooi— lc^o^>P-oooooi(^^t-lQCMOr■ ■^^1 1^ oi t— « t* »o c^ "o t" 00 "* w CO 2 CO o S ^ E: CO T-H rH <-l r-l t-( r-( i-H i-( O O >-< O ^O O) HOO^»OOli-HiO'«I*ir3-tO t~- (o Up ira (O ^H iQ ■v «D o »j o ■v o ■* t^ CD f- coo CO '^ S2 ® CJI _^Tli ^^ ^I- ,-<^<0 ^_TJi i-)^-^ i-< CO -H .-H ,— tO«Dr^COt^eDC^OOJi-HCOt*CMOOiOi-HO»OOOcOlOOOt^Cil C3 pi, =0 C0»0>0OC0as>0TfOOC^t-^OM<0JO0000CDr- t-coQocDinb-i-ooc^r-iot*or-mcCi-i'0000(D(OCMirai^iOC^O>COCOCOCOM^-ICOTtiCOC^OCO«Di- ' C0OOt^'-«t-»OC0"^CnC0c000eD000lOOCMC0'ft«Di-(O»t;^Pili-HrHa) tDi-(01C0O(0OCqO ■^ OOOOOOTf i-(O^00OCD i-l f-nO r-( OO CO ^rH'^1— lTj«>— >COl^ Pi Qi S 3 EETlREMEIfrT OP EMPLOYEES IK CLASSIFIED CIVIL SERVICE. 51 Sua o • Neo rHOMOr-lO Q rH O M N DO COOP4QmOOTt4CO-^ O C^ O C4 r-4 iH >Q Oi 00 CO M N N rH W -^ to e5 -SS o rH 55 m CO CO Tf CO T-l (N «ot-.eOQQi-Hgit-osO'!j-«o CS|(N oi-iiot^ino<»coi>t-.-tcoi» 0{Nt>5;ooigcoc-THO£3oO'-HOO.-H-«io ?Sf3 Oi-H 74tH10 C^C^cqOlCDOtr COU3C4CO CO CO u3 CO CO' IN o)r-ic*i iH o og ww^coi-HcoiocogccDcoeococooicocomosoj CONt>-00^00r-OaMOS-Tf?HQQ0rHlOCOi-HCi-lMcDmcDOaOJi-tCO'*l>eDi-HC!, rH rH rH rH rH iH i-H «» CO C0 CO e« w »» cor- 00 03 "* o ^.. , .}!rH>Oa500COOSNOiOCO'<»i'*t^CO»OWDOO ^-„^"*|>C00SO0S0JN<:-"^-rH00 OS QQrHO^rH»0^'!t »ocqt-wcoaoMr-(m»ONcom'0»fflcO"^coi>oO'ttH>oMrHco»oiraMNO eo'*«'noiooooooocorHOoocqegcoi-j'5'3;t>:«3S*°^"^'^'^'2 SI yj -dl -^ CD lO 1>- rH 00 L* r- O (D r* I> O t- CO CO CO CO Cq CD rH to eg ig OQ ;.«» ^.09 tti& ^^ ^w >.»» ^w '.w a» M CO «» ae «« w pj 00 r* m CO « 01 C» O) (N CO CO ■c ^ ^ « •S +> 4j & Pf Pi P4 p< a a a s 53 s ES d 3 3 s ^ CO o lO g 52 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. The foregoing statistics are consolidations of original statistics compiled under 20 groups, eacli of which was tabulated by persons employed, persons separated by withdrawal, and persons separated by death. Marital condition and war-service sorts and tabulations were also made. The first five years of service were tabulated separately both for employed and for separated. In the consolidation of the separations from the postal service allowance was made for average periods of substitute service, during which there has normally been a measurable amount of time not entirely devoted to the service. As in all such studies, much time had to be devoted to prorating over missing information. In tlie mechanical tabulating processes the Bureau of Efficiency was ex- tremely fortunate in enlisting the invaluable interest and as.sistance of Mr. Charles A. Kram, Auditor for the Post Office, whose experts personally han- dled much of the detail of punching, sorting, and tabulating the punch cards. Specimens of these cards, which were prepared in five forms at the Bureau of Efficiency, will be sent to interested persons upon request addressed to the Chief, United States Bureau of Efficiency. With the generous cooperation of the various department and bureau chiefs the questionnaire card here reproduced was given the necessary wide distribu- tion through all the civil branches of the Government service. The card for the use of postal employees differed from the other cards in the one respect that question 10 was broken up for separate answers as to substitute service and regular service. [Use typewriter — see instructions on bacfe.] United States Department of Commerce, Bureau of Efflciency. Bureau of tlie Census. Form 8. 8—4789-1 Record, of civil employee, July 1, 1916. 1. Name: (Surname iirst. Given name in full. For women write Miss or Mrs. before given name.) Make no entries in this column. 2. Department: 3. Bm-eau, ofllce, or seriace: 4. Designation of pasition: 5. Occupation (if not clearly sliown by answer to question): 6. Annuai earnings; 7. Kind of appropriation; 8. Present rate of pay: 9. fnitial rate of pay: 10. Tota' engtii of service (give tlie total of all U. S. Govt, service with tlie exceptions stated on the back of this card) — Years; Months; 11. State, Territory, or foreign country of birth (do not give to\^'n): 12. Race; 13. Sex; 14 Date of bu-th— Month: Year: 15. Kinds of schoo s attended, years attended, and degrees taken: 16. Marita ■ condition: 17. War veteran? 18 Appointed from— Congressional district or State: County: 19. Ci^^ -service status: 20 21 Method bv which classilied status was obtained: Place of employment- City: State: ISSTlit'CTIONS. It is requested that this card be filled out by the department and carefully reviewed by the employee to insure the accuracy of the department record. EETIREMENT OF EMPLOTEES IN CLASSIFIED CIVIL SERVICE. 53 Use typewriter to answer the questions on this card. If a typewriter is not accessible, have some person who writes clearly fill in the answers. Make the entries concise. Be careful to use abbreviations correctly. The information called for on this card should be furnished as of July 1, 1916', for all employees who on that date were in the executive civil service (that is, the executive department and other executive establishments, with their field services), except temporary employees, part-time employees (such as post light keepers, tide observers, etc.), and persons employed under enlist- ment contract or shipping articles. Persons appointed for a definite term of less than a year, including seasonal employees, should be excluded. Persons employed especially for a particular job. v,'hose employment will normally cease when the job is finished, should be excluded (for example, mechanics and laborers employed in consti-uction of public buildings and irrigation works). Include substitute post-office clerks, city carriers, and railway postal clerks, and also mechanics and laborers at navy yards and arsenals. Question 4. The designation should be given as shown in the order making the last appointment or promotion. Question 5. State, as specifically as possible in the space available, the pro- fession, trade,' or other line of work on which the employee is engaged, when practicable give not only the profession, science, etc., but the line of work within the profession, science, etc. Examples for persons engaged on scientific or technical work: Physicist (optics), mycologist (fruit diseases), paleontologist (vertebrates), drainage engineer. Examples for clerical employees: Steliog- rapher and typewriter, correspondence clerk, file clerk, bookkeeper, roster and time clerk, adding machine operator, copyist, general-utility clerk. If ' the designation of the position shows clearly the employee's occupation, write " See 4." Question 6. Give the total compensation for the last 12 jnonths. If an employee holds more than one position in the executive civil service, give the annual earnings for each position separately and also, in answer to in- quiries 4 and 5, state the nature of each employment. Question 7. State whether statutory ("Stat") or lump sum ("LS").. Question 8. If the employee receives an annual salary which is the same as the annual earnings stated above, answer "AS"; if the annual salary is different from the annual earnings give the salary followed by the abbrevia- tion " PA." If the employee is paid by the month, week, day, or hour, give the rate followed by the abbreviation " PM," " PW," " PD," or " PH," as the case naay be. If he is paid by the piece, answer " Pcwrk " ; if he is other- wise compensated answer, " Fees," " Commissions," "Allowances," or " Other," as the case may be. Question 9. Give the rate of pay at which the employee was originally ap- pointed to the executive civil service. Question 10. The reports made on this schedule will be used as a basis for computing the probable cost of a plan of retiring civil employees. Each employee's report will .become a part of his record, on which his annuity will be based if a retirement law is enacted. It is therefore important to give the employee's total length of service, including all periods of employment in the executive civil service of the United States, whether temporary or permanent. Whether in one or more branches of the service, and whether continuous or at different times, except service as a presidential appointee confirmed by the Senate- and as a. part-time employee or employee under enlistmeijt contract or shipping articles. Service as a presidential appointee confirmed by the Senate should be included if the employee had a classified status during his service as a presidential appointee. Do not include service. as an employee of the Congress or the United States courts or service as an officer or enlisted man in the Army, Navy, or Marine Corps. Question 12. Use " W " for white, " X " for Negro (including persons of mixed Negro blood), "I" for American Indian (including persons of mixed Indian blood)'. For other (yellow-brown) peoples, state whether "Chinese," " .Japa- nese," '" Filipino," or " Other." „„„ . V,-, .>r. " , Question 15. Use " E " for elementary or gi-ade ; " H ' for high ; C for college or university ; " P " for professional or technical ; " O " for other. After each .symbol enter in figures the numbers of years attended. Add in paren- thesis' the degree taken, if any, and , the course of study if not shown by the degree or if no degree was taken. Examples, E8 ; H3 (business) ; H4 (tech- 54 EETIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. nical) ; C5 (AB, AM, political scienre) ; 02 (architecture); P3 (LLB) ; PI (law). Question 16. State whether .sinsie C S "), married (" M "), widowed (includ- ing widowers) (" W "), or divorced ("D"). Question 17. If the employee served in the Civil or Spanish war, Philip- pine or any Indian insurrection, or other military engagement of the United States, answer, "Civil," "Spanish," " Pliil,"" Indian," or "Other" (specify- ing) ; if not, answer " No." Question 18. This answer, must show the congressional district and the State (under present Congressional apportionment) to which present appoint- ment is charged. Example : Congressional district and State, 7 Virginia ; county, Madison. Question 19. For classified employees (not including those appointed with- out examination under special provisions of law or under Schedule A, Civil Service rules) answer " C." For persons in positions excepted from examina- tion by law or Schedule A, Civil Service rules, answer " E " ; for persons ap- pointed by the President subject to confirmation by the Senate, answer " PC " ; for other unclassified employees, such as unskilled laborers, answer " IT." For Presidential appointees and employees in excepted positions who have retained a prior classified status, add the word " Classified " to the abbrevia- tions given above. Question 20. If the employee is classified (unless he holds a position ex- cepted from examination by law or by Schedule A, Civil Service rules) gtate whether he originally obtained his classified status by competitive examination ("CE") ; no competitive examination ("NCE") ; individual Executive order which specified the name of the employee ("lEO") ; blanket Executive order which covered in an entire class ("BEO"> ; or act of Congress which required no Executive order to carry it out (" AC "). Extension of the period of eligibility for reinstatement by individual or blanket Executive order .should be reported .-is " lEO," or " BEG," as the case may be. Reinstatement to a position that was covered into the classified service by blanket Executive order or act of Congress during the employee's separation from that position should be reported as " BEO," or " AC," as the case may be. Tran.sfer from the Philippine Service should be reported as " CB " for " com- petitive examination." If the employee is not classified or occupies a position excepted from ex- amination by law or Schedule A, Civil Service rules, write '" NC " for " not classified." Question 21. If a traveling employee, give permanent station or headquarters. Sexwration records were at the snme time secured through the same oflices through the medium of a questionnaire sheet drawn up to correspond to the questionnaire card above reproduced. The questionnaire campaign was launched jointly with the Bureau of the Census. By the happy arrangement with that bureau the diflBcult and tedious task of editing the questionnaires for mechanical analysis was carried out through a special staff assigned to the work by the courtesy of Director Sam L. Rogers, of the Bureau of the Census. Following is the list of original cards and sheets received, arranged by bureau or office : United States Civil Service personnel records — Number system. [Cards for each department or service are grouped first, by employees in Washington, and second, by employees outside of Washington, each group arranged by bureau according to code and alphabeti- cally by name of employee within bureau. For card numbers 1 to 157000 see under P. O. Dept.) SUMMARY. Department and service. Employed July 1, 1916. Separated five years. Card Nos. Persons. Sheet Nos. Persons. 157001-1S7044 157061-167343 1,58601-184242 190501-207901 222.501-224502 44 293 24,867 16,818 1,940 1 State (all) 3-4.. Treasury ^all) 31-1119 War (all) 1301-1863 Justice (all) 2001-2016 EBTIEEMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 55 United States Civil Service personnel records — Number system — Oontimied. SUMMARY— Continued. Department and service. Employed July 1, 1916. Separated five years. Card Nos. Persons. Sheet Nos. Persons. Post Office: Rural carriers 1-37950 37,950 1 18,748 900001-907114 1 Railway mail /+205 4851-4975 t43001-61542 63001 First and second class post offices 2051^647 Inspection service 144801-145320 145401 520 2044-2046 Post Office Department 2026-2042 Postmasters 147401 Navy (all) 226761-260955...... 5101-fi264 Tntorinrfflll) 262751-273410 273001-284484 284531-289245 289331 10,506 11,485 4,714 6401-6639 6651-6730 . . . Commerce (all) 6751-6798 Labor (all) 6811-6829 ... TrififipftTiHflTil: offif^ns (all) ... 291351-303261 303286-306122 11,750 1,821 6841-6968 Government of the District of Columbia 6976-7015 (all). " DETAILED. Executive State Treasury: Office of tile Secretary Office of the chief clerk Division of Appointments Office of the Supervising Architect Office of the Comptroller of the Treasury Office of the Comptroller of the Cur- rency Office of the Treasurer of the United Office of the Register of the Treasury. . . Office of the Commissioner of Internal Revenue Office of the Director of the Mint Office of the disbursing clerk Coast Guard headquarters Bureau of the Public Health Service. . . Section of Surety Bonds Division of Bookkeeping and Warrants. Division of Customs Division of Loans and Currency Division of Public Moneys Division of Printing and Stationery — Division of Mails and Files Division of Secret Service Division of Special Agents Auditor for the Treasury Department. . Auditor for the War Department Auditor for the Navy Department Auditor for the Interior Department . . . Auditor for the State and Other De- partments. Auditor for the Post Office Department, Bureau of War Risk Insurance - . General Supply Committee Bureau of Engraving and Printing. Supervising architect at large- Public building service Custodian, janitor service Mint and assay service Customs service Internal-Revenue Service Subtreasury service Public Health Service Coast Guard Service National bank examiners, etc Federal Farm Loan Bureau. 157001-157044. 157051-157343. 1S8501-1S8531. 158536-158857. 158861-158878. 158881-159135.. 159251-159288., 159291-159451. 159461-160022. 160031-160051. 160062-160572 160591-160602 160606-160618 160821-160672 160681-160721 160731-160735 160736-160784 160791-160833 160836-160933 160935-160954 160956-160975 160986-160995 161001-161009 Included in Secre- tary's Office. 161011-161111 161116-161319 161321-161420 161421-161521 161526-161600 161601 162171-162173 In ludedin Secre- tary's offi''e. 162176-166239 184106-184242. 166246-170371. 170431-171095. 171101-177587. 177611-181562. 181611-181915. 181931-183618. 183631-183681. 183686 184086-184096. 31 322 18 255 38 161 562 21 521 12 13 52 41 5 49 43 98 19 20 10 101 204 100 101 75 487 3 4,064 137 4,126 665 6,487 3,952 305 1,688 61 11 31-50. 31-50. 61-83. 91 95^614.... 801-809... 816-903... 951-1015.. 1031-1039. 1046-1119. 1 Rural separations listed on cards. 56 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. United States Ciyil Service personnel records — Number system — Continued. DETAILED— Continued. Depaf tment and service. Employed July 1, 1916. Separated five years. Card Nos. Persons. Sheet Nos. Persons. War: Office of the Secretary 190501-190606 190607-190691 190692-191264 191285-101275 191276-191294 191295-191582 191.'583-191714 191715-191818 191819-191907 191908-192026 192027-192066 192067-192129 192130-192392 1923 '3-192423 192'2)-192<38 192441-1'58062 19P3^'l-203204 2033'*l-207639 207581-207701 207741-207827 207831-207896 207901 106 85 673 11 ID 288 132 104 89 119 40 63 263 31 15 5,622 4,824 4,159 121 87 66 1 Office of the Chief of Staff i Office of The Adjutant General Office of the Judge Advocate General.. Office of the Quartermaster General Office of the Surgeon General Office of the Chief of Enijineers Board of Engineers of Rivers and Har- bors. Office of the Chief of (^rdnance 1321-1454 . Office of the Chief Simal Officer Bureau of Insular .\fiairs Office of Public Buildings and Grounds. Division of Militia . . Office of Chief of Coast Artillery 2 ... Quartermaster Corps oi the Ariny 1.551-1646 Ordnance Department at large 1701-lf03 Signal Service at large 1851-1853 United States Military Academy National military park commissions.... 1862 1863 Other 1861 Justice: /+1 1 278 1 1 1 15 11 7 2 11 2001-2006 \222501-222777 222781 Department. Office of the Solicitor for the Post Office 222786 Department. Office of the Solicitor for the Depart- ment of State. 222791 222796-222810 222811-222321 222826-222832 222s 36-222837 222841-222851 With Attorney General's Office. 2228.56-222877 222381.-22 1106 22il07-221515 22l5!l-22i317 224331-224447 224151-224502 1-37950 Office of the Solicitor of the Treasury.. . Office of the Solicitor of the Depart- ment of Commerce. Office of the Solicitor of the Depart- ment of Labor. - 2011 Revenue. of Columbia). Customs Division 22 226 409 787 117 .52 37,950 1 18,747 United States penitentiaries 2013-2016 Offices of the United States attorneys. . Offices of the United States marshals Bureau of Investigation field service. . . National Training School for Boys Post Office: 900001-907114 2 1+205 4851-4975 143001-61542 63001 First and second class post offices 2051 63001-63549 63601-63605 63611-63775 63801-64205 (64226-67615 549 5 165 405 \ 3,413 2051 Alaska 2071...:..... 2086 2121 6S291-67220 67616-68362 67723-68119 757 2231 Connecticut .... 63356-69436 2266 69061-69792 69801-70691 70711-71187 71196-72)26 71244-71541 132 887 477 831 2.301... ■ District of Columbia 2311. Florida . 2316 2351... Hawaii... 72066-72126 72146-72,332 61 207 2396. Idaho 2401 Illinois 2431 1 Officeof Toast Artillery's Office is a part of Chief of Staff's Office. 2 Rural separations listed on cards. RETTEEMENT OF EMPLO-^EES IN CLASSIFIED CIVIL SERVICE. United States Civil Service personnel records— Number sys Jem— Continued. DETAILED— Continued. 57 Department and service. Employed July 1, 1916. Separated five years. Card Nos. Persons. Sheet Nos. Persons. Post office -Continued First and second class post offices— Con. Inuiata,., 80681-82469 81264-S1718 1,789 2641 Indianapolis Iowa 82.531-S3973 84011-84937 849B1-85758 8521)-85573 1,448 927 798 Kansas ■ 2826 Kentucky 2896 Louis . ille Louisiana 85781-863.S0 600 2936 New Orleans 85917-86307 Maine 86411-86937 86956-88046 86970-87896 527 1,091 2961 Maryland 2991 Baltimore Massachusetts 88066 . 3011 Michigan. . . .- , , . . 93856-96326 942' 1,5-95184 2,471 3111 Detroit Minnasota 96371-98093 975)8-97970 . 723 3201 St. Paul Mississinpi 98141-98446 306 3266 Missouri 3291 ■ Montana ^... 3346 Nebraska '. 101876-102669 102691-102743 102756-103'D87 794 53 332 3366. Nevada 3401 New Hampshire 3406. 3431 New Mexico 3501 3516. . 121141-121709 121731-121925 569 195 3721. North Dakota 3761 3786 Oklahoma 126946-127582 127(\06-128236 637 631 3901 3946 3981. Porto liico 135891-135948 135961-136506 136546-1368S5 136906-137106 137146-137975 58 .546 340 201 830 4176 Rhode Island 4186. . - . South Carolina.. . 4201 4236 Tennessee 4266 4301 :... Utah. 139911-140189 14023P.-140463 279 228 880 1,045 424 1,564 4386. . . . 4406 4441 141436-142480 142566-142989 143036-144599 143591-144146 4481 West Virginia 4626 4561 144711-144777 144801-145320 145401-145760 146171-145977 145981-146082 146091-146469 146476-146879 146886-147085 67 520 360 207 102 379 404 4641 2044-2046 ■ Post Office Department— 2026-2028 2030 -. 2032-2033 2035-2037 2039-2042 4701-4704 147151-147388 Included in Fourth Assistant Office. 226751-226808 226809-226816 226817-226832 226833-226842 2268 3-226852 226853-226868 226859-226868 Included in Wash- ingtiin Navy Yard. 226869-226894 226895-226011 226912-226936 238 4707-4™ 6005-5006 Navy: 68 8 16 10 10 6 10 Office of Naval Records and Library Office of the Judge Advocate General.. Office ol the Board ol Inspection and Survey. Office of the Naval Examining Board. . . Office of the Naval Retiring Board ■ Office of the Board of Medical Examin- ers. X Office of Target Practice and Engineer- ' ing Competitions. • ' Navy Disbursing and Allotment Office. " ■ Headquarters of the Marine Corps Nautical Almanac Office 1 26 17 25 58 BETIREMKNT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. United States Civil Service personnel records — Number system — Continued. DETAILED— Continued. Department and service. Employed July 1, 1916. Separated five years. Card Nos. Persons, Sheet Nos. Persons. Nnvy — Continued. 226937-227002 227003-227053 227054-227157 227158-227209 227210-227243 227244-227367 227368-227438 227439-227531 227532-227547 22754S-227557 [Included in Wash- < ington Navy I Yard. 227558-227576 2275S1-230123 23)158-231376 231391-234119 234151-234468 /-I 66 51 104 .52 34 124 71 93 16 10 1 Naval Observatory Bureau of Yards and Docks Bureau of Ordnance Bureau of Construction and Repair Bureau of Supplies and Accounts ■ Bureau of Melicine and Smgery Division of Naval Militia Affairs Communication Office Office of the Admiral of the Navy Office of the Chief of Naval Operations. . Navy yards — Boston. [: 1 19 2,413 1.219 2,729 318 } 3,325 1 2,381 1,463 1,623 } 4,096 79 1,149 13 5101-5145 Mare Island 51.51-5223 5501-55D5 Norfolk 5226-5293 \241461-244786 /+2 . .. Philadeli)hia 5301-5366 \244S81-247259 247461-248923 248941-250563 f+l 5371-5398 Puget Sound. 5401-5430 5431-5434 \25 !601-254696 251801-254879 254880-256028 256116-256128 Omitted Naval training stations 5601 Torpedo stations 5676 Nava 1 War College 6001 Naval proving ground, Indian Head. . . Nava' stations 6101 6112 257071-157982 258611-258649 258666-159342 259366-259370 259371-250611 258616-259954 259956-259989 259991-260011 260016-260069 260201-260)84 260491-260929 260941-260946 260951-260955 912 39 677 5 241 339 34 21 54 284 439 6 5 6116,6118,6119,6121, 6122-6125,6128,6129, 6131-6140,6146,6131. 6148 6152 Naval Home, Philadelphia, Pa Naval Academy, Annapo iis, Md Naval radio station, Radio, Va 6156-6162 Na 'y aeronauti station, Pensacola, Fla. United States Marine Corps at large 6176 6186-6187 .. . 6194 6195 Inspection and construction service Naval hospitals 6206-6216,6220-6225 6231-6264 Interior: 262751-263028 263029-263062 263063-263589 263600-263857 26385S-264971 f — 1 278 34 527 238 1,114 } 940 75 420 96 99 21 1 1 1 5 677 3,674 433 \ 419 Woi 6404 f I:::::.. 6406-6418 Co umbia). 6426-6475 of Co umbia). 6501-6508 6511-6517 1264972-265910 265911-265983 263986-266405 266403-266501 266506-266604 2S6605-266625 266626 6521. of Columbia!. Geological Survey (in the District of Co'umbia). Reclamalinn Service fin the District 6522-6527.. . 6531-6536 of Columbia^ Bureau of Mines (in the District of Colum- 6581-6588 biai. Office of Super intendent of Capitol 6591 Buildmgand Orounds. Ofiire of register of wills 266327 266628 Board of Indian Commissioners Insp-'ctors in the Offlce of the Secretary. 2606U-266635 266636-267112 267326-270999 271026-271458 f-l-l Land Servi''e Reclamation Service .- RETTEtEMENT OP EMPLOYEES IS" CLASSIFIED OtVIL SERVICE. 59 United States Civil Service personnel records — Nrnnber system — Continued. DETAILED— Continued. Department and service. Employed July 1, 1916. Card Nos. Persons. Separated five years. Sheet Nos. Persons. Bureau of Mines (in the District of Colum- bia)— Continued. Bureau of Education ileld service and Alaska &eld service. Bureau of Mines field service National parks and reservations Territorial service Alaskan En^eering Commission Institutions in the District of Colum- bia— ovemment Hospital for the Insane Columbia Institution for the Deaf . . . Howard University Freedmen's Hospital Agriculture: Office of the Secretary (in the District of Columbia). Weather Bureau (in the District of Co- lumbia). Bureau of Animal Industry (in the Dis- trict of Columbia). Bureau of Plant Industry (in the Dis- trict of Columbia). Forest Service (in the District of Colum- bia). Bureau of Chemistry (in the District of Columbia). Bureau of Soils (in the District of Co- lumbia). Bureau of Entomology (in the District of Columbia) Bureau of Biological Survey (in the Dis- trict of Columbia). Division Of Publications Library Division of Accounts and Disburse- ments. Bureau of Crop Estiniates. States Relations Service (in the Dis- trict of Columbia). Office of Public Roads and Rural En- gineering (in the District of Columbia) Insecticide and Fungicide Board (in the District of Columbia). Office of Farm Management. . ; Office of Information 271891-271905. , 271906-272136., 272111-272238.. 272241-,272258.. 272261-272405. Office of inspection Federal Horticultural Board (m the District of Columbia) . ■ Office of Markets and Rural Orgamza- ■ tion (in the District of Columbia). Office of the Secretary field service Weather Bureau field service Bureau of Animal Industry field service Bureau of Plant Industry field service . Forest Serviee field service Bureau of Chemistry field service Bureau of Soils field service Bureau of Entomology field service.... Biological Survey field service Bureau of Crop Estimates field service. States Relation Service field service - . . Office of Pubhc Roads and Rural En- gineering field service. Field service of the Insecticide and Fungicide Board. , „ j.- , Field service of the Federal Horticul- tural Board. „ , « Office of Markets and Rural Orgamia- tion field service. .. ^ , , Office of Farm Management field serv- ice. Commerce: „ . Office of the Secretary Bureau of the Census 272406-273194.. 273201-273270.. 273271-273350. . 273351-273410. . 273001-273317. . 273318-27350... 273531-273910. . 273911-274575. . 24576-274872. . . 274873-275194.. 275195-275330. 275331-275442.. 275443-275512.. 275513-275680. . 275681-276713.. 275714-275742.. 275743-275853.. 275854-276050. . 276051-276235. 276236-276275. 276276-276385..... Included in Secre- tary's Office. do — 276186-276404 276405-276641.. 276642-276651 . . 276652-277)08.. 277J0J-280866.. 280867-281237.. 2812J8-283738. . 283739-283980.. 283981-283987 -. 283988-284188.. 284189-284246.. 284247-284288.. 284283-284356. . 284357-284437.. 284438-284443.. 284444-284453. 284454-284473. 284474-284485. 284531-284700. 284701-285271. 15 231 18 145 789 6598-6599. 6601 6603-6630. 78 59 317 213 380 665 297 322 136 112 70 168 33 111 197 185 40 110 19 237 10 657 3,558 431 2,441 242 7 201 58 42 68 81 170 571 6634 6638-6639. )6651-6730. 6751-6752. 6753-6755. 60 RETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. United Stales Civil Service personnel records — Number system — Continued. DETAILED— Continued. Department and service. Employed July 1, 1916. Qard Nos. Persons. Separated fiye years. Sheet Nos. Persons. Commerce — Continued. Bureau of Foreign and Domestic Com- merce (in the District of Columbia). Bureau of Standards (in the District of Columbia). Bureau of lisheries (in the District of Columbia). Bureau of Lighthouses (in the District of Columbia). Coast and Geodetic Survey (in the Dis- trict of Columbia). Bureau of Navigation (in the District of Columbia). Steamboat Inspection Service (in the District of Columbia). Bureau of Foreign and Domestic Com- merce field service. Bureau of Standard? field service Bureau of !^isheries field service Lighthouse Service Coa tand Geodetic Survey field service. Bureau of Navigation field service Steamboat-Inspection Service field service. Labor; Oflice of the Secretary (in the District of Columbia). Bureau of Labor Statistics Children's Bureau Biu*eau of Immigration Bureau of Naturali^ation Immigration Service at large Naturalization Service at large Independent oTices: Bureau of Efficiency Interstate Commerce Commission — Division of Valuation (in the Dis- trict of Columbia). Other diWsions m the District of Columbia. Division of Valuation (field scr'.'ice). All other (field service) Civil Service Commission- In the District of Co) Limbia In r,he field Federal Reserve Board Federal Reserve Board (Ofiicc of the Comptroller of the Currency). Federal Trade Commission. .". The Panama Canal — Washington oilice United Plates (outside of the Dis- trict of Columbia.) In the Canal /one ( gold roll) Government Printing Office Office of the Superintendent of the State, War. and Navy Department Building. Boards and commissions under the President — Board of Mediation and Concilia- tion. Commission of Fine Arts Library of Congress— Librar V of ( 'ongress proper Cop \Tight office Litirarv Building and grounds Smithsonian Institution — National Museum International Exchanges Bureau of Vmerican Etlinology National Zoobglcal Park Astrophvsicai Observatory Internationa' Catalogue of Scien- tilc Literature. United States Botanic Garden 285272-2S3383. 285384-285708. 285709-2857S8. 285789-285827. 285828-286115. 286116-286U6. 286147-286157. 286158-286201. 286202-286249. 286250-286563. 286564-288845. 288846-2.88910. 288912-288986. 288987-289246. 289331-289404., 289406-289507., 289508-2S95S3., 289584 289643-289706., 289707 1+2 1291272-291350. , 291351-291363. 291371-291720. 291731-292366. 292371-293296. 293301-293478. 293181-293657. 293S61-293705. 29371 l-29.i762. 2937'iS-293770. 293771-293939., 293951-2910.52.. 294091-291127. 294131-29S103 . . 23S111-301971.. l+l 1301991-302194.. 302211-302215. 302221-302222. 302226-302638. 302541-302631. 302641-302776. 302781- 303121- 303136- 303156- 303216- 303226- 303116. 303135. 303155. 303215. 303221. 303230. 112 325 80 39 288 31 11 44 314 2,282 65 75 259 6756 6757-6761. 6762-6766. 6767-6792. 6793-6795. 6796 6797-6798. 6811. 102 76 6813 6814 6816-6828. 6829 303231-303261 . 13 350 636 926 178 177 45 52 102 37 3,973 3,861 5 2 313 91 136 336 15 20 60 6 5 31 5841-6852. ).6856-6857. 685S-«859. 6861 -686.1-6867 6871-6905. 6906-6924. .6951-6955. 6956-6957. .6961-6963. 6964 6965 6966 RETIREMENT OF EMPLQ-OIES IN CLASSIFIED CIVIL SERVICE. 61 United States Civil Service personnel records— Number system— Continued. DETAILED-Continued. Employed July 1,1916. Separated five years. Card Nos. Persons. Sheet Nos. Persons. government of the District ot Columbia: Executive office Assessor's office Auditor's office 303286-303297. 303301-303346. 303351-303383 12 46 33 Bathmg beach B oard of Charities Board of children's guardians 303386 303396-303418 303421-303432 303436-303455 303461-303464 303466-303477 303481-303487 .303491-303566 303571-304099 304111 23' 12 20 4 12 7 76 529 Collector's office Coroner's office Corporation counsel's office Disbursing office Engineer denartment Excise board Fire department 304121-304681 304601-304674 304681-304716 304721-304739 304746-304763 304766-304770 461 74 35 19 18 6 3 Health department Home for the Aged and Infirm Industrial Home School (white) Industrial Home School (colored) Insurance department Municipal lodging house '304776-304778 304781 National Training School for Girls Playgrounds 304811-304825 304831 is 80 82 Police department ■. . Public i^ibrary 305761-305842 Other cards re- ceived. 30.')846-305864 305871-305908 305911-305913. 305916-305938 305941-305976....'.. 305981-306054 306061-306122 Public schools Public Utilities Commission 19 38 3 23 36 74 62 Purohiasing office Soldiers and Sailors TemporaryHome. Superintendent of weights, measures, - and market office. Tuberculosis Hospital Washington Asylum Jail ■ Workhouse Several points of more or less technical character must be referred to in explanation of the methods employed in passing to the cost figures from the statistics. The " exposure " was exceptioually large — equivalent to the observa- tion of over 1,250,000 lives through one year or such part of a year as they con- tinue in the service. It was sufficiently great to permit direct calculation with- out resort to formal graduation or the consolidation of more or less unrelated salary scales. The orl'ginal conbined material is remarkably free from disturb- ing fluctuation.s, so that no difficulties were encountered oii the score of irregu- larities. Formal graduation was not deemed necessary. To the extent, how- ever, of determining pivotal values and interpolating salary accumulations at odd points in the quinquennial group, methods tantamount to graduation were in fact employed. A table is here submitted showing the observed separation rates as derived' directly from the statistics; and in columns (4) and (5) of that table the expected rates of separation by mortality and from disability, and in column (9) the rates of separation that may properly be expected under the proposed retirement jjlans. The methods of derivation of the several columns are clearly indicated in the captions of the columns. So far as I know, the method here used to derive the expected separation rates was first employed two years ago by Mr. Herbert D. Brown in some unprinted work on a pension plan for school teachers of the District of Columbia. In an extension of the table, as indicated by the continuation of the column numbers, is the calculation of the expected ultimate distribution of the persons who will retire as superannuates. The distribution derived (column 21) was employed in the determination of the ultimate distribution of the cost between the Government and the employees as computed in Exhibit B aud Exhibit No. 2. 62 RETIREMENT OF EMPLOYEES IN . CLASSIFIED CIVIL SERVICE. Observed 6-year separation rate without retirement plan (separation diuded by 2). 11 ;|gS||g||| .-("OO § ■ • Expected 5-year separation rate tilth retirement plan (computed from 9 by formula). 10 3«05 2360 1793 1419 1152 1046 1104 1486 2170 < o Expected annual separation rate -with retirement plan (8 plus 4 plus 6). sssssssss o Expected discretionary rate of separation with retirement plan (6 less 7). 8 0723 .0407 .0276 .0182 .0107 .0065 .0024 .0008 .0003 Expected reduction in discretionary separation rate with retirement plan (zero at lowest age; entire at eligibility age). 7 0048 .0080 .0113 .0145 .0177 .0209 .0242 .0274 .0306 .0322 "Discretion- ary" rate of separation ■«-ithout retirement plan (3 less 4 less 6). 6 o A.ssumed rate of disability. (Hunter's ultimate). 5 0.0005 .0005 .0006 .0007 .0009 .0013 .0019 .0033 .0070 .0161 .0111 .0136 Assumed rate of mortality (United States life tables, 1910). 4 oSSSoooooo oo o Actual annual (pi/otal) separation rate (Jan. 1, 1913), at middle age of group. 3 ooSooooooo b Exposure. 2 b-—<»Oi--5eD[XMOi-lOCvI iOTfii-tTfoeocN(Nooi>iMt^r^cD-v "SSSSSSSSS'^ Age group. <0'£ O C ftC S5^ s p 20 up to 25,. 25 up to 30.. 30up to35.- 35 up to 40 . . 40 up to 45 . . 45 up to 50 . . 50up to55.- 55 up to 60.. 60 lip to 05.. 65 up to 70.. ;b 6142 4176 3002 2460 2069 2000 1749 1933 2348 2932) ;0 ^ :SSSSSSSSSS . ,b 1186 0769 0614 0391 0292 0262 0165 0103 0044 0005 o oo r^ to ic •«' M e*iH o m ° i ■*tDO«3eOocooi^(Nos-*oo d ssssssssss oirtcscccoiooooitor- (MOcDCsXMTfOCOX^HO «t-(N'«'OI--.-H00* o>ai t^ vu TJHMOOQOOCOWOO C-l--lrH.-lrt.-l CO OS-'lH-tfH COl>-f-ICO OOO'^CMtNtXNT-irHOt* ouaeococooiOOJOoDooi O0SM00C0-*'^»'-*O'^00C0 O-^cDNcoWsoiraWioeOQ OOTt. to eo ■«»< .H »H r^ oi oi N t^ O t-H CO "* CO 1-i O0a0000c0t»'tt^ MidooosM-^QoitO '^co^ioaSojooc' C<)e>1»P4C^l-HrHfH(-4p. OOi-HWOOOOOtO Hcouiooi- oojcoeooosoji- •Scoeo'3Tf<'viou3eDa 64 KETIREMENT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. STATEMENT OF MR. EOBERT H. ALCORN, CHAIRMAN JOINT CON- FERENCE COMMITTEE ON CIVIL SERVICE RETIREMENT. Mr. Alcorn. Mr. ChairmE^n, I would like to say just a few words in conclusion. First, I want to say in behalf of those not here, members of the conference committee and all interested in this legislation, I desire to thank the chairman for granting us this hearing, and I would like to say further that we shall be very i^leased to meet when you think it is convenient for you to have the committee meet again and give us a chance to hear those who are not here to-da}'. Dr. Maddrill in commenting on the McKellar-Keating bill from the viewpoint of an actuary, points out certain actuarial shortcom- ings of the bill. In considering his criticisms, I would also like you to consider a certain economic and social omission from the bill, which is that it makes no provision for those cases of physical and mental disability occurring under the ages of 65 and 68 for the two groups of employees concerned. It is not merely age that determines . the state of superannuation, it is the bodily condition. In Order to obtain the measure of relief from superannuation desired, a retire- ment bill should make provision for careful consideration of those cases of disability on account of age occurring under the year limits set for the average cases. If any changes in the bill are to be con- sidered, this feature should also receive serious consideration. I would further invite your attention that the first object to be obtained by the enactment of this proposed bill would be to provide proper subsistence for the superannuated employees now in the civil service and that during the days of war-time prices. A pension of $600 per annum is only $-50 per month, and any less than that amount would fail to keep a man and his old wife who have labored together these many years. The scale of $6 per year for 30 years would only net a man $180, a pension of 50 cents a day for 30 years' service. Let us make it a dollar a day for 30 years service. A dollar a day would bring the pension up to $360. Next in order to bring the pension up to the lowest possible subsistence figure for the present superannuates, raise the other $6 factor proposed, up to $8, totaling $140 for 30 years' service, and ihaking a grand total of $600. Under this modification the bill would read : The Government grants you a tlollar a day for thirty years' faithful service, ■ all employees from now on purclia.sinu- in addition an annuity based on a two and one-half per cent contribution from his or her sahiry, made as a loan to the Government, and for the period prior to the riassase of this bill the Government ' grants each employee .f8 for each year of service in addition to the dollar a day. The McKellar-Keating bill is the result of a determined effort on the part of many men of many minds to agree on certain fundamental principles. It provides a bare subsistence for the present, super- annuates above ■ certain ages only, it provides sufficie,nt revenue to finance the first few years of its operation, it directs 'the keeping of records and the making of reports to the Congress of the actual opera- tion of the system', and we belieA'e that if passed without change it will be a tonic to the civil service. If its actuarial shortcomings are RETIKEMUNT OF EMPLOYEES IN CLASSIFIED CIVIL SERVICE. 65 . to be considered and remedied, we pray that the basic principles of adequate care for the present, superannuates, of not more than 2| per cent contribution, and of safeguarded provision for those physically superannuated while still under the prescribed ages, be carefully con- sidered and preserved in the revised draft. The committee will now stand adjourned. Thereupon, at 12 o'clock, noon, the committee adjourned subject to the call of the chairman. 80909—18 5 Cornell University Library JK 791.A5 1918f Retirement of employees in the claw^^^^ 3 1924 002 434 086 .:• , r *. • (■■■- V f, . .:?#::.'■•'■ ■ ''''■'■ ''''.. ." «