of $7,500 a year will stand during the few months that Senators and Representatives are in town, and it remains there after they have left, to the despair of the year-long residents. The inadequacy of the average Government salary of $948 or $1,079 is more apparent when one reflects that two-thirds of the employees subsisting on that salary are engaged in clerical or research work, which means that they are persons who have been brought up in some degree of comfort and refinement, and have received a considerable amount of education. It is fair to say that, under the operation of the civil-service law, they are really a "select class," above the average in ability and training, a very large and increasing number of them college graduates, men and women who are the intellectual and social peers of any official class in the world. Of the more than 1,300 employees in the Bureau of Plant Industry, Department of Agriculture, for instance, between 700 and 800 are doing scientific work, and 500 of those are university graduates. While $1,079 a year might not be called an inadequate salary for some classes of workers, in some localities, it certainly can not be called fair or adequate for a person of education in the city of Washington, or comparable with the salaries received all over the country by people of equal abilities doing similar work in business fields. Finally, the fact is plain that the Government clerk has few opportunities of making money outside of his employment or of investing his savings. His manner of life is not calculated to develop business acumen, and information in regard to desirable investments is not likely to come his way. He reaches old age more dependent than in his youth on the stipend of his office, and he usually hangs on doggedly until death releases him. LACK OF PLAN MEANS PECUNIARY LOSS TO GOVERNMENT. In the second place, the service suffers severely by the retention of the aged in office, as less work is performed for the amount of money appropriated than would be the case if each employee did his full share. Just how much loss in actual number of dollars is sustained by the Government through the inefficiency of the superannuated it is difficult to estimate, but an attempt has been made to do so. report on superannuation in the civil service made by a special committee of the National Civil Service Reform League in 1906, the Civil Service Commission is quoted as authority for the statement that those over 70 years of age do about three-quarters of the "maximum quantity of work performed by a thoroughly efficient employee." This loss to the Government through superannuation in the departments at Washington amounts therefore to about $400,000 a year. 1 1 See Special Report U. S. Civil Service Commission to the President, p. 3. The committee of the National Civil Service Reform League continues the computation as follows: There are nearly five times as many classified United States employees outside Washington, but only two-fifths as large a per cent are over 70; therefore there are outside Washington twice as many over 70. On the same basis of efficiency the loss outside Washington would be $800,000, or, in the whole classified service of the United States, $1,200,000.1 Since the service is now much larger than when the estimate was made, the loss to the Government is probably considerably greater. In other words, to the extent of that sum of $1,200,000 a year the Government already has a civil pension list. LACK OF PLAN PREVENTS PROMOTION OF YOUNGER EMPLOYEES. In the third place, great injustice is done the whole body of employees by retention in office of the aged and infirm, since the younger clerks not only have to do the work of their elders, but are also kept from merited promotions. The great extent of the loss through superannuation is partly due to the fact that the old employees are usually drawing the highest salaries in their respective offices. This fact is well brought out in the last annual report (1910) of the Hon. M. O. Chance, formerly Auditor for the Post Office Department. Says he: An unusually large proportion of the employees in this office are persons who have passed the age of greatest usefulness. While the efficiency records of some of them are equal to those of the younger clerks, it is nevertheless a fact that the general average of efficiency among the aged clerks is below the standard. On account of their infirmities, both they and the service would be better off were they to be honorably retired on adequate annuities and their places given to younger and more active men. Many of these aged people, by reason of long service, are receiving the highest clerical compensation of the office, and thus handicap the work and the finances of the service. In a speech made at a meeting of the Civil Service Retirement Association on January 29, 1907, the late Hon. Charles H. Treat, Treasurer of the United States, said that he had never seen anything more beautiful than the way in which employees habitually carried along one of their number who had grown too old for the work, sharing his labors among them uncomplainingly. While such a spectacle may be inspiring to the idealist, its practical effect on the young and ambitious is discouraging. NEED OF RETIREMENT MEASURE EXPRESSED BY ADMINISTRATIVE OFFICIALS. These, then, are the conditions which confront every administrative official in the executive offices. Accustomed to the alertness and dis 1 See Report on Superannuation in the Civil Service, 1906, p. 6. patch characteristic of business offices in private life, he usually plans, on first coming to Washington, to do some departmental house cleaning that shall put his office on a strictly business basis, but whatever his ability as an organizer, he soon finds himself powerless, without some means of retiring the aged members of his force, to effect any considerable reforms. A statement to this effect will be found in the annual reports for years past of Cabinet officers and chiefs of bureaus in the several departments as well as in the published reports of hearings before congressional committees.1 The present Secretary of the Treasury, the Hon. Franklin MacVeagh, expressed himself in favor of a retiring allowance for the superannuated in his 1909 report, as follows: RETIRING PENSIONS. Any inquiry into the efficiency of administration very soon involves a consideration of a policy of civil-service retiring pensions. And it seems to me that the conclusion is unavoidable that a really efficient service is out of the question without a method of honorably and justly retiring persons whose efficiency is seriously impaired. It is quite true that the older clerks of the service are no more likely than the younger clerks to be inefficient. Indeed, their experience and their settled relations to the service could easily compensate for the lack of some other personal equipment. But just as there are instances where the younger clerks should be disciplined or dismissed, so there are many cases among the older clerks where, in justice to both themselves and the service, they ought to be honorably relieved. The service is blocked in many instances by the unwillingness of the officials in charge to throw out of place worthy men and women who have given the best of their lives to the work of the Government. So that, in a very imperfect and wholly unsatisfactory manner, practically a pension system is and long has been in operation. The United States is the only nation that has no general legal retiring pension for the employees of its civil service. We have this unique position in the 1Annual Messages to Congress of William Howard Taft, President of the United States, 1909 and 1910. Reports of Franklin MacVeagh, Secretary of the Treasury, 1909 and 1910. Reports of Richard A. Ballinger, Secretary of the Interior, 1909 and 1910. Report of Frank A. Hitchcock, Postmaster General, 1909. Report of Joseph Stewart, Second Assistant Postmaster General, 1909. Reports of Civil Service Commission, 10th, 11th, 19th, 20th, 22d, 25th, and others. Statement of Gen. F. C. Ainsworth, Chief of the Record and Pension Office, War Department, February 12, 1904. Statement of William Dudley Foulke, Member of the National Committee on Superannuation, Civil Service Reform League, February 23, 1904. Statement of Frederick I. Allen, Commissioner of Patents, February 26, 1904. world, along with a reputation for great wealth and for otherwise liberal expenditures. The entire civilized world has shown great and growing recognition of pensions or retiring allowances; and while the United States is so far behind the rest of the world in civil pensions, it has by far the largest pension list among the nations. The war and navy pensions are a recognized part of our policy, and in the civil service pensions have been extended to the judiciary. And though as a government we have halted at a general retiring allowance for civil employees, the great universities of our country and the great corporations have been taking immense steps along this very line, and the Federal Government is becoming more and more isolated. While I have spoken only of the effect upon the service itself of the lack of a system of retiring pensions, there are, as everyone knows, other claims upon the Government to establish this policy. I hope that the Congress will take up and consider favorably one of the various forms of law that are proposed. This subject has been before the country and before the Government for a long while, and if the policy were to be adopted at this time it would undoubtedly give a strong impulse to that improvement of every branch of the service which is now so much desired by the people and which is a matter of so much interest to the Congress and to the administration. In expressing my opinion in favor of the retiring allowance, I purposely avoid the expression at this time of a preference for any particular plan or system. In his next and most recent report (1910) Secretary MacVeagh went further and declared himself in favor of the "contributory plan." Said he: I now beg to refer, as I did last year, to another requisite—another absolute requisite of a satisfactory service. There is no practical way to put the Government service properly on its feet without a fair and just method of civilservice retirement. This is not only a requisite, it is a prerequisite; and unless Congress shall give the Executive this necessary method of improving the service the country must accept a service that is not fully satisfactory and which can not be made fully satisfactory. Fortunately this retiring provision can be made-and this is mathematically demonstrable-without the expense of one dollar to the Government. The contributory system of retiring allowances is not only the only system that has any chance whatever of being adopted, but it fortunately is the best system by far for the men and women of the service; and it is, therefore, the part of wisdom for all the friends of this movement to concentrate upon this method. Of course, there must be paid by the Government the retiring allowances until the contributions by the members of the service have become sufficient to take care of the payments; but these preliminary payments by the Government need not cost the Government anything whatever. All of the executive departments which have so far been consulted stand ready to carry out such a law without asking any addition whatever to their ordinary appropriations. The objection, therefore, that we might be introducing another pension roll has no justification. It had complete justification as long as the straight pension was in contemplation. The contributory allowance, however, is an entirely different matter and eliminates this objection altogether. The Government, therefore, can without any expense to itself, and by the mere passing of a law, set this whole matter right. It is only necessary to mention two things about the contributory plan, as contrasted with the pension plan, to make clear its advantages to the people in the service. It could never be taken as an answer to a claim for increased pay. It is a contribution of their own and not a contribution of the Government, and it is in no sense an estoppel of any argument in favor of increased pay at any time during its operation. On the other hand, a straight pension paid by the Government would always be taken as an additional salary and would perpetually have a tendency to estop any argument for increased compensation. The other consideration is that under a pension system a man must not only live beyond the retiring age, but he must continue always in the service until that period in order to receive any pension at all; whereas under the contributory system, under all the accidents of life, he gets what belongs to him of the savings of the system. It is impossible not to regard a straight pension as a part of the salary, and if a man loses it altogether, owing to the accidents of life, he loses a part of his aggregate salary. The Treasury Department is engaged in the work of increasing its efficiency and diminishing the relative expense of operation. It has made considerable progress, but has not nearly reached the end. At least 400 positions have been abolished. So far we have been able to take care of all the displaced employees, except in the case of the mint at Philadelphia and in other offices outside of Washington and New York, where, in the nature of the case, there were no opportunities for transfer. We have succeeded in transferring those who were displaced to places becoming vacant in the normal way, such vacancies having been allowed to accumulate by temporary appointments. Whether it will be possible to continue to take care in this way of the employees whose positions we are abolishing I do not know. But this is clear, that any successful effort to improve the administrative operations of a large department like the Treasury is immediately handicapped and might well be discouraged entirely by the absence of a just method of retirement. And even when it is possible to protect these displaced clerks from being thrown into the streets it is done, in many cases, in denial of the right of an office to efficient help. Working in these improvements brings constantly to mind the hopelessness of ever arriving at a complete state of efficiency without a way of retiring clerks in a just and humane manner. I have no doubt that this very discouraging feature has in the past stood in the way of many attempts to improve the eficiency and economize the expense of operation in the departments. The Hon. Ethan A. Hitchcock, while Secretary of the Interior, said in his annual report of 1905: It has been the policy of the department to select persons for employment therein of ability and integrity, and to insist upon the strict performance of the duties assigned them. Many branches of the service, however, have suffered by reason of the growing incapacity of some of the clerical force, for which there is no adequate remedy without doing injustice in many cases. On July 1, 1903, the number of employees of the department in Washington aggregated 4,166, of which 758 were between 50 and 59 years of age, and 810 60 years and over. The total number of employees of the department on the 1st day of July, 1905, was 4,082. The most recent census among the bureaus and offices of the department is that taken in the Pension Office, which shows a total of 1,634 employees. Of this number there are 516 over 60 years of age, and the average age of all being 50 years and 3 months. This average, however, will doubtless be less at this time in other branches of the service. The system now in use relative to the maintenance of the clerical force is unsatisfactory and expensive, and some provision by way of retirement should be provided to meet the conditions that exist. I therefore renew the recommendation contained in my last annual report that appropriate legislation be enacted by Congress for the retirement from duty of superannuated clerks or aged employees. 74196°-S. Doc. 745, 61-3- -2 |