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Mr. BODEN HAMER. Yes; the assessment is one-half of 1 per cent. Senator KIRBY. Have you more than one home?
Mr. BODENHAMER. No, sir.
Dr. JORDAN. The cost of that is increasing year by year?
Mr. BODEN HAMER. We have not increased the per capita payment. Of course, the pension is increasing. We have got to the point right now where the expense just about equals the income of that system. The CHAIRMAN. It will be more than doubled in 20 years. After it has been in operation for 20 years, as I understand these figures, they more than double.
Mr. BODEN HAMER. We have found that out, as I have said. At the beginning we laid by a fund for this pension system for a long time before it went into operation, and that principal fund has never been touched. We have simply lived on the income, but the income now is being just about taken up with the expense, without going into the principal fund, so that sooner or later we are going to either increase the assessment or reduce the pension; and, of course, we will not reduce the pension but we will increase the assessment.
There has been and is now an agitation to increase the pension to the old members, and there is quite a great deal of merit, we consider, in the proposition to increase it, but until we have reached a point where we can afford to increase the assessment, of course we can not increase the pension. It is something that the Government can well look into, that you gentlemen can well look into, and find out the operation of that system and the benefits that accrue to the old-age members of the International Typographical Union from it.
Dr. JORDAN. How many members are affected by that system throughout the United States?
Mr. BODEN HAMER. Do you mean on the pension roll?
Dr. JORDAN. No; I do not mean pensioners. How many are contributing to the fund?
Mr. BODEN HAMER. Our membership is 65,000. They have on that pension roll at this time 1,509. Since the pension has been in operation the International Typographical Union has paid a total of $2,026,042.70 to its superannuated members. In the same time it has paid almost an equal amount as mortuary benefits, the money being raised the same as for the pension.
The CHAIRMAN. Mr. Laclair, the committee will be glad to hear from you.
STATEMENT OF MR. H. T. LACLAIR, EMPLOYEE OF WASHINGTON NAVY YARD.
Mr. LACLAIR. Mr. Chairman, I can state that I represent a part of the supervising force of the Washington Navy Yard, and some of the people that appeared before the committee previously spoke of this as a possible emergency war measure. In a sense it would help the situation very materially in the navy yard.
The CHAIRMAN. Have you many superannuated employees in the navy yard?
Mr. LACLAIR. Not to the extent that they are in the clerical departments. Very few of the men reach the age in the mechanical departments. We do not appear to have so many old men above the age
of 70 in the mechanical departments. Whether they die or not I do not know, but we have looked over the situation in the shop where I am employed, and we found one man who had reached the age of 70 and who is to a certain extent retired, so far as we are concerned. We are paying him the same rate of pay he has always received, but he is not doing the same kind of work or the same amount of work, and right alongside of him, showing the disparity of age at which men lose their efficiency, there is a man of 60 years of age who is performing his regular work as a machinist, and these men, we believe, become inefficient at an earlier age in the mechanical branches of the service than in the clerical forces.
Of course, it is not universal. Some men last longer than others, but we find that men are responsible for getting out the products in the plant down there; that we get up against this same proposition that all of the other departments do. We find men that get old on the work. They are good men and have done good service and are getting too old to keep up the pace, and the pace is getting faster every year, in our industry as in others, and we have got to have some relief somewhere in order to get out the product and give the younger men a chance. If we had some system of this sort-some sort of retirement in vogue-we could take these men after they are unable to perform their regular duties and take them out, and we could get apprentices in their places to do their work at considerably less money, and in that way it would be an economy. We could no doubt get just as good and better work out of these boys, and to that extent I think it would be helpful to the general efficiency of the plan, and it really is, in my opinion, very necessary that some system of retirement should be put into vogue as soon as possible, so as to get rid of these old men whom we can not discharge and do not want to discharge, but who should be gotten rid of so as to make room for more efficient men.
The CHAIRMAN. Next is Mr. Smoot. Smoot.
You may proceed now, Mr.
STATEMENT OF MR. W. H. SMOOT, OF THE NAVAL GUN FACTORY.
Mr. SMOOT. Mr. Chairman and gentlemen of the committee, the question of retirement has been pretty thoroughly, to my mind, discussed here by the various departments and those who are in charge, and so on. I am representing the employees of the Naval Gun Factory, one of the industrial departments. We in our department, the industrial department of the Government, have a different condition confronting us than the majority of the Government employees. As Mr. Laclair has stated, they reach a mature age, or an age of deficiency, much earlier than they do in the executive and judicial departments of the Government.
I have listened with quite keen interest to what has been said here with reference to retirement, and I want to criticize especially, not to do it pointedly or to critize anyone in particular, but speaking of the cost of this retirement and relative cost and expense and the comparative salaries paid by the Government and the outside employees, I am not saying it to cast any reflection upon the Government officials or the method in which the Government performs its
function, but I will say that the Government is obtaining its labor anywhere from 50 to 200, and in some instances 400, per cent cheaper than the outside manufacturers.
The CHAIRMAN. Why is that? Why will a man work for the Government for a salary of $100 a month when he can make from $200 to $250 in private work?
Mr. SMOOT. Mr. Chairman, probably you misunderstood me. I mean to say that the cost of a production for the Government to let contracts was anywhere from 50 to 200, and in some instances 400, per cent-it costing the Government to produce their contracts with private firms-than to produce it themselves.
The CHAIRMAN. I misunderstood you.
Mr. SMOOт. Of course, we have a great many men in our particular line that are making more money than we are; that is, their salaries are considerably larger than ours. Of course, some of them are working a considerable number more of hours than we are.
The CHAIRMAN. In the War Department, Gen. Crozier testified that the cost was about 10 per cent less in the factories than it was in the private plants.
Mr. SMOOT. To produce the same work?
The CHAIRMAN. Yes.
Mr. SMOOT. That condition-who made that statement?
The CHAIRMAN. Gen. Crozier, as I recall, in a hearing over before the Military Affairs of the House.
Mr. SMOOт. I would not pretend to criticize Gen. Crozier, because he is a man who has had considerable experience in the manufacture of ordnance, and he should be thoroughly conversant with that subject, but I will give you a statement of the contract cost, not to criticize Gen. Crozier at all, but say, for instance-it is a fact; it is not a "for instance" at all-but in the manufacture of munitions the Government manufactures 3.8 shells at a cost of $2.92, minus the base fuse and primer, and include in that about $5. The same shell is manufactured by an outside manufacturer for $17.50 per shell. Senator WALCOTT. To our Government?
Mr. SMOOT. To our Government. You can just draw a comparison there yourself.
The CHAIRMAN. More than three times as much.
Mr. SMOOт. More than three times as much. That is a record of Congress.
The CHAIRMAN. I will say this, that Gen. Crozier was testifying before the beginning of the war-before the abnormal conditions due to the war.
Mr. SMOOT. I would like to state, too, that these figures that I am quoting were in 1913 and 1914-no; it was 1912 and 1913. It was even before the European war, so that, it is my opinion, if the Government is compelled to take such enormous prices for this product manufactured by the outside firms, it would seem to me that it would be nothing more than fair that they would be willing to divide with their employees.
References have been made that they consider that we should bear at least 50 per cent of the cost of this pension. If we are saving the Government millions of dollars even in separate contracts, which we do in the Naval Gun Factory, at this factory alone in ordnance,
we think that the Government should be liberal enough to divide. with us anyway, and superannuate the employees who have performed their duties. We are not asking for pensions for men who are in position to perform their daily duties like we are. Of course, I am not one of the young men any more, but I am not one of the old men; but, nevertheless, men of our profession do not last as long as they do in the other departments, because of the tax upon them and a constant grind and the accurate work that we have to contend with. It soon tells on us, and of course our work is entirely different from other departments, because we have got to show a considerable production in order to make any showing at all, and it takes a young and vigorous man to-day to keep the pace.
I would like to say also that it has been quoted here that the various corporations are retiring their employees, such as the Pennsylvania Railroad, the Bell Telephone Co., the General Electric Co., the United States Steel Corporation, and other various roads and large corporations of the country. In my opinion, I think that a man or a woman-I will not exclude the women, because I think they are just as deserving as the men-I think that anyone that serves the Government 30 years of faithful service should certainly be given a privilege after they are physically disabled to retire. I certainly think that it should be taken into consideration seriously, because we have a number of men with us who have served 30 and 35 years, and they are comparatively young men, yet they started at very early ages-anywhere from 15 to 18 years of age-and, of course, when they have served 30 and 35 years they are comparatively old men in a sense. There is no comparison between them and a clerk in the War Department, or in any one of the Government departments. As I say, there is a great deal more expected and required of them, and our duties are different entirely; so it makes quite a difference, especially from our manufacturing end, to what it does in the judicial or executive departments.
The CHAIRMAN. The committee will be glad to hear Mr. Tighe, who desires to submit some remarks upon the subject under discussion.
STATEMENT OF JOSEPH M. TIGHE, DELEGATE OF NEW ORLEANS BRANCH AND COMMITTEEMAN OF UNITED STATES CIVIL-SERVICE RETIREMENT ASSOCIATION.
Mr. TIGUE. Mr. Chairman and gentlemen of the committee, the preceding four days of hearings having dwelt upon the expediency and necessity of some retirement system and the features of the several methods, I will only make a short statement, dealing chiefly with the failure of enactment of a retirement law heretofore.
During the last 40 years about 90 retirement bills have been introduced in Congress, a campaign of education of 40 years without results.
Especially during recent years the failure of enactment of a retirement law has been attributed to inability to agree upon its terms. At the annual convention of the straight-pension advocates on or about March 5, 1915, Congressman Goulden, introduced as the father of straight-pension retirement, stated that a retirement law could have
been enacted about eight years previously, when, in committee, Chairman Gillett stated a contributory pension law could then be passed, but that he (Mr. Goulden) insisted upon a straight-pension plan, but had since feared he had erred in such refusal, as he beheld the steady stream of aged Government employees being sent from their life-long occupations to die in the poorhouse. Congressman Goulden concluded with the advice to the convention that if they could not get their favorite law they should take the next best thing.
During the last several years we have been denied a retirement. law on the statement that we were divided on what we wanted— into different associations, each insisting upon its favorite method.
Our country is the only modern civilized country without a social insurance system; and, together with Turkey and Haiti, is the only country without a civil retirement system. None of those systems could have been established had they been predicated upon all the employees or all the citizens agreeing upon the terms of the respective laws.
I happen to have had an intimate and satisfactory experience with the contributory retirement system of Senator McKellar's home city, whereby my mother was the first teacher to retire under the Memphis city schools retirement system. 9 years ago, after 40 years of teaching. Her aged comrades, in a similar state of collapse, regarded her retiring as a risky experiment at first, but later did likewise. While the system has since been altered from voluntary to compulsory membership, I understand its financial strength has continued to grow during its nine years of existence.
The preceding portion of this hearing has shown that the effect of the straight pension plan is to leave the widow and children the worse for it, as the employee, having worked for less salary during his life's work than he would have without the pension in view, he has more likely been unable to accumulate the nest egg or other investment the extremely frugal may have accumulated: and the pension dying with the employee, both before and after retiring, the widow and children are left destitute.
The president of the straight pension advocates, at the hearing May 23, 1916, stated that a hundred thousand resignations of United States Government employees had occurred since 1908. Those men should not lose the withheld portion of their pay, termed deferred pay, as such flocking out of the service can, not be the fault of the employees. Whereas by the contributory method, having the features of the savings bank account, the employee possesses some capital on which to recommence life's occupation or to leave as a little estate to his dependents.
The Studensky manual, previously submitted, after making a much more detailed comparison than the foregoing, concludes with recommending a combination of the straight and contributory methods as a generally satisfactory compromise and promotive of best results. This seems to be the unanimous opinion at this series of hearings, as well as to accept any system your committee will decide upon, and this I heartily indorse.
A glorious credit to the contributory method is the Washington Soldiers' Home. It was launched about 1857 on an unclaimed bit of Mexican War soldiers' prize money and an $18,000 unused remnant