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RETIREMENT OF CIVIL SERVICE EMPLOYEES.

JULY 12, 1917.

UNITED STATES SENATE,

COMMITTEE ON CIVIL SERVICE AND RETRENCHMENT,

Washington, D. C.

The committee met, pursuant to adjournment, at 9.30 o'clock a. m., in room 226, Senate Office Building, Senator Kenneth D. McKellar presiding.

Present: Senator McKellar (chairman).

Also present: Mr. H. M. McLarin, Mr. Thomas F. Flaherty, Mr. John S. Beach, Mr. W. C. Ryan, Mr. Willard F. Warner, Mr. M. F. O'Donoghue, Mr. Edward J. Ryan, Dr. Lledellyn Jordan, and Mr. Robert H. Alcorn.

The committee resumed the consideration of the bills (S. 157, 281, and 633) for the retirement of employees in the civil service.

The CHAIRMAN. The committee will come to order. Who is the next witness?

Mr. ROBERT H. ALCORN (chairman Joint Civil Service Retirement Committee). Mr. Chairman, I suppose it is your desire to get through by noon if you can.

The CHAIRMAN. If we can; yes. I would like to do so.

Mr. ALCORN. For that reason I will ask the speakers that we call on this morning to be as brief as they can covering the points that you desire. I suppose the committee will allow supplemental statements to be filed within a period of something like 5 or 10 days. The CHAIRMAN. Yes.

Mr. ALCORN. The next speaker on the program is Mr. McLarin, of The Federal Employee, a magazine published monthly by the Federal Employees Union.

The CHAIRMAN. You may proceed, Mr. McLarin.

STATEMENT OF MR. H. M. McLARIN, PRESIDENT FEDERAL EMPLOYEES UNION, WASHINGTON, D. C.

Mr. McLARIN. Mr. Chairman and gentlemen, we are urging this law at this time because of the fact that we believe it is a necessary war measure. Anyone who will go into the departments here and go through them will see that they have literally thousands of old men and women who are not able to stand the pace which is being set in the Government work to-day. The conditions, on account of the war, have got to change, and a great many of the older people will not be able to adapt themselves to the change. So instead of their doing something, getting forward with things, putting the Government service on an efficient basis they are in the way of these new

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men. Of course, some people would say that we ought to get rid of them. But you can not do that when you have had people working for you all their lives for a mere pittance, who come into the service and stay there largely because they thought they would get something better. They have given their services for long years and there is no humanity in the man who would advocate the retiring of these employees from the service without some provision for their mainte

nance.

There is one particular feature that has characterized all of the retirement bills that have been introduced up to date, and that is that they confine themselves to the classified employees. Now, the classified employees are the particularly fortunate ones in the service, with a better education, and they are the ones receiving the higher salaries. The unclassified employees are the men and women who do the drudgery and who do the coarser, harder work; thousands of them have been in the service just as long and have worked just as hard and just as faithfully as have any of the classified employees.

The CHAIRMAN. How many are in the unclassified service?

Mr. McLARIN. I can not say, but I will insert that in the record. The civil-service report gives it; it shows about 280,000 in the classified service, and about 200,000 are in the unclassified service. So these bills, all relating to the classified service, discriminate absolutely against the unclassified man because he has not been able to pass an educational examination.

The CHAIRMAN. Included among the unclassified service are Congressmen and Senators; all others who work for the Government, regardless.

Mr. McLARIN. Yes, sir. It includes people in the Library of Congress, people in the District government; none of these are classified, and all the laborers throughout the service are unclassified. The internal-revenue collectors and the deputy collectors are unclassified. Particularly the largest number, though, is composed of laborers in the lower grades of work.

The CHAIRMAN. Well, you easily see that if we establish anything along that line it will have to be grades established. You could not give all the same retirement pay, such as is proposed among civilservice employees.

Mr. McLARIN. These retirement measures provide for grades according to the pay received by the employee.

The CHAIRMAN. Some of them do and some do not. think, provides for a flat retirement rate of $50 a month. be more than some of the laborers get, or about as much when in service.

One bill, I That would as they get

Mr. McLARIN. We would also obviate that. That is as much as the messengers and the skilled laborers get. They are classified. It is a distinction without a difference.

The CHAIRMAN. Well, I think if we have any retirement pay, it ought to be graded.

Mr. McLARIN. Yes.

The CHAIRMAN. All right, I did not mean to interrupt you. Mr. McLARIN. Take, for instance, the employees over here in the Library; many of them are highly educated and skilled, and yet there is no bill which has been introduced so far to cover the Library

of Congress, and employees around the Capitol, men who have been here years and years, none of them are included. Employees in the District of Columbia government are not included. So, I want to impress upon the committee particularly the necessity for not thus discriminating against these lower grades of employees, or some of the lower grades, simply because they have not been able to pass this educational test to come within the civil-service classification. This civil-service classification is nothing except an arbitrary line laid down, whereby a man may or may not be classified according to the service in which he serves, or whether he is able to pass an educational test that any high-school boy can pass.

Now, with regard to the cost of the retirement system, I have been in consultation with Mr. Brown, the head of the Bureau of Efficiency. The figures which he has estimated to-day show that there are about 6,000 employees over 70 years of age now in the service, 6,000 of the classified employees, and that the cost of their retirement immediately for the first year would be something over $2,000,000, and for the succeeding years for a number of years it would be approximately $3,000,000 for 10, 12, or 15 years. But in that same connection I wanted to call attention to the figures disclosed by the Census bulletin of 1907, which is the latest information available as to the number of employees of all ages, etc. A computation from this bulletin, percentages used in that bulletin, shows that the percentage of employees at this time is practically the same as it was at that time of any given ages. For instance, Mr. Brown's latest investigation shows that there are 6,000 employees 70 years and over, and the figures of the Census bulletin show 1.2 per cent of employees aged 70 years and over. Take that same percentage and apply it to employees now in the service instead of the number in the service in 1907. You get 6,000; so that the percentages compiled in the Census bulletin are applicable to it. Using this percentage for the computation of cost of retirement at this time, you will find that the total number of employees is 488,000. The percentage of employees aged 70 years and over is 1.2 per cent. One and two-tenths per cent of this 488,000 is 5,864. Now, the average salary of these employees 70 years and over is $1,118, and if you multiply this amount by the number of these employees you get a total of $6,555,952, which would be the amount that would be saved by removing the superannuated employees from the rolls.

Half of this number of younger employees could do the same amount of work that these older employees do, and the entrance salary of these younger employees is $1,000 a year; so if you take 2,932, half of the number of superannuated employees, and multiply it by $1,000, you get $2,932,000, which is the total amount of salaries to be paid to the new, young employees who would replace and do the work of the employees retired.

The retirement of 5,864 superannuated employees at $600 a year will cost $3,518,400 per annum. The saving from this retirement by this dropping from the rolls of such a number of superannuated employees is $6,555,952. The new employees costing $2,932,000 and the retired pay of the superannuates amounting to $3,518,400 makes a total cost to the Government, if the employees were retired, of $6,450,400. That makes a net saving by the adoption of this $600

annuity to the Government each year of $105,552; so that the cost of this retirement plan without regard to contribution or any other confusing figures will be absolutely nothing to the Government.

The CHAIRMAN. That is, provided that the number of employees is reduced.

Mr. McLARIN. Provided that the number of employees is reduced, and any officer that you wish to consult will tell you that the number of employees can be reduced if the superannuated ones are retired, and it is altogether a reasonable proposition. Now, I have here statements from a number of Cabinet officers and other Government officials that are valuable in this connection, but in order to get them in a concrete form I am going to ask to insert them in the record. The CHAIRMAN. All right. I will ask you to insert these in the record.

Mr. McLARIN. Yes, sir.

(The statements referred to above are here printed in full, as follows:)

[From the Federal Employee for January, 1917.]

DEPARTMENT HEADS FOR RETIREMENT.

In a personally signed letter Secretary Lansing said, in part: "I am heartily in favor, generally speaking, of an equitable retirement law for the benefit of superannuated employees of the Government. I have not, however, given the subject detailed consideration, but will be pleased to do so when opportunity offers."

Secretary Baker renews, in his last annual report, the recommendation of his predecessors for an equitable retirement law and states his conviction that "the Federal Government is and should be a model employer." In conclusion he says:

"The effect of such a law would be to give an assurance of a competent and comfortable old age. It would relieve the employee from the fear of loss of occupation and of livelihood, would further inspire him to loyalty to the Government as an employer, thus improving the general quality of the service rendered by Government employees, although that is already high, and would permit the replacement of some employees in the various departments who have long and faithfully served the Government and reached venerable but enfeebled years without having had an opportunity to accumulate any competence upon which their retirement can rest.'

Secretary Redfield makes an exceptionally strong plea in his annual report for a retirement law, and concludes by saying:

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That the efficiency of the executive civil service is seriously impaired by reason of its superannuated employees, and that the prompt enactment of some equitable form of retirement law is one of its greatest needs, are facts conceded by practically all persons who are at all familiar with the problems of the service. Efficient service and justice to employees demand a comprehensive, wide-reaching, and effective scheme of retirement pensions, the advantage of which is being more and more widely recognized by progressive commercial establishments and by foreign governments. While doubtless the cost of a civil-service retirement scheme would for a few years add to the expense of the administration, it would be a good investment, and in a short time the service would be recouped the additional outlay many times over by the saving it would render possible. The standard of efficiency would be raised, the work could be done with less force, and this would be accomplished without heartlessly throwing out of employment men and women who for decades have given their best service to the Government and who have no means of subsistence other than their decreasing salaries."

Secretary Wilson also, in his last annual report, devotes considerable space to the question of superannuation and emphasizes the necessity for early enactment of a retirement law. The following is an excerpt from his report:

"In a previous report of the department attention was drawn to the difficulties confronting executive officers of the Government impelled in the interests

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