annuity is just as much a compensation as is the monthly salary. It is given as a reward for long and faithful service, and is now recognized as a fixed charge on every well-regulated business.

The McKellar-Keating bill has its imperfections, and it is not all that we desire, but we earnestly hope and trust that when the bill becomes a law it will contain the provisions already provided therein in so far as they relate to the benefits that are to be granted. I have not much compassion or sympathy with some views that many take of this matter in so far as looking forward to the actuarial principles involved in it or as to the cost proposition. It is true we should know what it will cost, and true, there should not be a burden put upon the Government, but it seems to me that it would be a simple plan for the legislators of this country to adopt and enact a bill that will give justice to those superannuated men and women now in the Government service, and I hope, Mr. Chairman, that when the committee gives serious consideration, as it no doubt will, to this bill it will report to the House the provisions of the McKellar-Keating bill in practically its present form. I believe, Mr. Chairman, that in that bill there should be a provision which would provide for taking care of the man in the Government service who has risen by his own efforts from a position in the civil service to a high and exalted position, such as that of an appointment by the President that carries with it confirmation by the Senate. We have a number of those men. I further believe that the principle of deductions, involving as it does a deduction of 21 per cent of the salary, should not be carried above the $1,200 grade. I think that as the bill provides that retirement may be made upon the basis of $600 per annum of a $1,200 · salary, the deduction should be made on the same basis.

I thank you for your attention and hope that the committee will favorably report the bill.

Mr. ALCORN. I would like to have the committee to hear Mr. Gibbons, of the United National Association of Post Office Clerks.

STATEMENT OF MR. WILLIAM F. GIBBONS, SECREARY UNITED NATIONAL ASSOCIATION OF POST OFFICE CLERKS, 620 COLORADO BUILDING, WASHINGTON, D. C.

Mr. GIBBONS. Mr. Chairman, it is not my purpose to keep the committee here in session very long. Rather, I think that the committee deserves to be given a rising vote of thanks for sitting throughout this very oppressive day. The heat is simply unbearable. I do not know that I can add much to what has been said here this morning and this afternoon. The bill has been carefully gone over, or, rather, the items in the bill have been carefully gone over and discussed by people who have give the subject of retirement years of careful study. However, there are two points that I would like to bring out: One of them is with reference to the remarks of the distinguished chairman this morning, in interrogating one of the speakers in regard to the long years of faithful service of the employees being responsible for creating the millions of wealth, and, therefore, making them deserving of a pension from the corporations.

The other point was discussed by Congressman Hamill, of New Jersey, and I think we all agree with our good friend Mr. Hamill,

who has given great thought and study to this matter, that the Government should take care of the faithful and efficient employees who have remained in the service for so many years. The bill before you is not ideal in every respect. The organization which I represent, the United National Association of Post Office Clerks, has for years advocated a straight pension bill or noncontributory bill, but this year the representatives of all the organizations got together and agreed with Senator McKellar and Congressman Keating to stand by and support this bill. Therefore, our organization, which has formerly advocated a straight out and out pension bill, is ready and willing to stand shoulder to shoulder with all the other organizations and do everything within its power to have Congress enact this bill during this session if it is at all possible. I think that if this bill is favorably reported to this session of Congress, it will pass by an overwhelming vote in the House, and I also think the same is true of the Senate, where Senator McKellar will champion the bill.

Before concluding I wish to present to you former President Taft's indorsement of legislation for the retirement of the superannuated civil employee.

[From address to the Boston convention of the United National Association Post Office Clerks, Sept. 3, 1912.]

We are having a great deal of trouble, or supposed trouble, with what is called superannuation; men who have reached the point where their work is less efficient than it was because they have grown older. Disease may have overtaken them, old age steals over them, and they are not as effective by half as they were 10 years ago. What is to be done? They have ceased, really to be efficient. Now, that is between you and me. We know it. They-the Lord spares them the knowledge and they don't know it. But you and I know it. Now, what happens? There is a statute on the statute book that says when they become inefficient they must be dismissed. Are they dismissed? No; and why not? It is because you can't get a department head. and you can't get a bureau chief-unless ice runs in the veins-and there are not many of them who will recommend a man who has served 30 or 40 years in the service for dismissal at 70 when he hasn't anything to live on after he has given up his life to the Government. You can pass statute after statute and the department head with the milk of human kindness will look at that man's efficiency through his eyes, not through the eyes of the intelligent head clerk, and he will continue to recognize his efficiency until the Government makes some provision by which that man may be retired. First I was in favor of a simple, straight pension, of which the Government paid all. After studying, however, I have become convinced that it is neither good for the Government or the civil servant to have such a system. ** I would have a mixed system by which you would have enforced insurance with contributions from the Government. * * Now, you can collect a small, only a very small, percentage, the Government beginning and helping and ultimately you will get a fund large enough to take care of everybody. And I would have it a fund in which everybody is interested, and from which everybody may withdraw his share whether he continues in the service or not, withdrawing it at the time he either leaves the service voluntarily or from cause.

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I trust that the distinguished chairman of this committee will do everything in his power to urge a favorable report on the bill at as early a day as possible.

I wish to thank you for your attention.

Mr. ALCORN. I believe you have the statement of Dr. Maddrill, of the United States Bureau of Efficiency, who has given considerable study to this statement. I wish to state that the committee of conferees here, or, rather, those representing the joint conference, would like to have that statement included in the present hearing.

The CHAIRMAN. I was just going to suggest that if you desire, or if the others interested in the matter desire, that this statement of Dr. Maddrill be incorporated in the hearing as if he himself had presented it; I shall be glad to have it done.

Mr. ALCORN. We would like to have it done.

SUGGESTED BILL AND STATEMENT BY DR. JAMES D. MADDRILL, ACTUARY, UNITED STATES BUREAU OF EFFICIENCY.

A BILL For the retirement of employees in the classified civil service. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, beginning on the first day of January, nineteen hundred and nineteen, all employees in the classified civil service of the United States who have on that date or shall have on any date thereafter rendered at least fifteen years of service, computed as prescribed in section four of this act, and reached the age of sixty-eight years shall be eligible for retirement on an annuity as provided in section three hereof: Provided, That the age of eligibility for retirement of city and rural letter carrers, railway postal clerks, and mechanics in any branch of the civil service shall be sixty-five years: Provided further, That postmasters shall not be included 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 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 office is intermittent or of uncertain duration.

SEC. 2. That, beginning on the first day of January, nineteen hundred and nineteen, there shall be deducted and withheld from each payment of the salary, pay, or compensation of each person to whom this act applies a sum equal to two and one-half per centum thereof. The Secretary of the Treasury shall cause the said deductions 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 such salaries or compensation 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.

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.

(b) A sum of $6 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 January one, nineteen hundred and nineteen.

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 disbursement 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 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 act 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 unclassified 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 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 provided 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 which he or she was em ployed shall be included.

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 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 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, such certificate to be issued not less than seventy days before the arrival of the 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 two years, and so on: Provided, however, That from and after January one, nineteen hundred and 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 the United States for more than four years beyond the age of eligibility 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 provided 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 application for retirement and annuity made after an application for retention in the civil service shall not be construed as a waiver of the application for such retention.

Upon receipt of satisfactory evidence the Director of the Bureau of War Risk Insurance shall forthwith adjudicate the claim of 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 provided for herein, 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 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. S. 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 re-instatement, 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 computed, 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 or compensation 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 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 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 nine of this act.

SEC. 11. That for the purpose of administration, except as otherwise provided herein, the Director of the Bureau 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 provisions of this act into full force and effect.

SEC. 12. That payment of annuities, refunds, and allowances as herein provided shall be made by the disbursing clerk for the Bureau of War Risk Insurance, 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 payment of annuities, refunds, or allowances 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. 13. 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 disabilities 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 such 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 needful tables, records, and accounts required for carrying out the provisions of this