Mr. FALLS. But the purchasing power of the dollar to-day is much less than it was then, and that is the point that I wanted to make. Mr. MANN. The Keep Commission has made recommendations which would involve thirty-seven different classes. Mr. FALLS. But we care nothing about the classification, we only care about the purchasing value of the dollar received. Mr. MANN. You think you are getting too much pay now? Mr. FALLS. No; but I am perfectly willing to take less, sir, if the Government thinks I do not earn it. But what I want is that the gentlemen who give us this money and who prepare this bill must remember that the purchasing power of a dollar which they give us to-day, whether it is $1,200 or $1,400 or $1,600 or $1,800, is very much less than was the purchasing power of the dollar away back when the salaries were fixed in 1854. Mr. MANN. I do not think the purchasing power of the dollar has changed so very much. STATEMENT OF MR. M. F. O'DONOGHUE, OF WASHINGTON, D. C. Mr. O'DONOGHUE. Mr. President and gentlemen of the committee, I do not know that I can add anything in the way of statistics to what has been stated here, but there is something that came under my observation in my career through life to which I want to call your attention, and from which a lesson might be learned. As I understand it, this committee is trying to find a means of overcoming the obstacles that now stand in the way of the removal of superannuated clerks. Some years ago I was in Canada and was in the employ of the Canadian government, in the city of Ottawa. After serving there for some time I resigned, and came down here and entered the service of the United States Government under a competitive examination. Now, the Canadian government is small and relatively poor as compared with that of this country, and yet at the same time they have a perfect state of government up there, and during my residence in Canada I never heard of any dissatisfaction in the departments up there. There is none of the worrying up there which we notice here, and none of the deterioration of the service, and nothing like the amount of anxiety that the clerks here experience as to what shall happen to them as they shall become older, lest they should be forced to retire from the service here which incapacitates them for anything else. I sent to the Canadian government for a copy of their bill The CHAIRMAN. It was submitted here yesterday. Mr. O'DONOGHUE. I think from that and from the kindred bills from the other civilized governments of the world elsewhere a vast amount of valuable information can be obtained. Now, when I came here I could not see why it was that this Government, essentially democratic in its origin, could not provide for its servants as other civilized nations do. I remember that before I left Ireland I taught school there, and since I left there the teachers have been pensioned by the Government. Then I taught school in San Francisco, and since I left there the teachers have been pensioned, so that pensions seem to be following me [laughter], and I am beginning to wonder if they will not overtake me at some time other. I have been tempted on general principles to resign from the service of the Government, with an idea that it would be for the general welfare, and to take care of myself on the outside; and perhaps if I am driven to it, I will do that. Now, gentlemen, I have been in the Departments here and I know a great many of the elderly clerks. I was at one time in a certain Department, and I would not go through with my experience there again for a great deal. At that time I was appointed by Mr. Cleveland as chief of a division, taken out of the classified service and put into the unclassified. There were 60 clerks in the division at that time, and there was provision made for only 57 clerks. The period pending these reductions to make the number of clerks conform to the number provided for was something fierce. Another thing that has struck me is that the clerks in the Departments of Washington are more closely allied to the flesh and blood. of Congress and even of the Presidents than can be found anywhere else in the world. I can point out to you from California, the State where I came from, the sister and brother of a Congressman; I know the sister-in-law of a Senator, and I know the mother-in-law of a general, and I know the wife of a brigadier-general, and I know a brigadiergeneral himself, all in the Government service; so that when you strike at the Government clerk you are striking indirectly at the flesh and blood of Congress and of the Army and Navy and of the heads of the Executive Departments. The clerks, I say, are of the flesh and blood of Congress, and to a large extent they are the very best element in the United States. I have been all through it, and I have seen it, so that from a humanitarian standpoint and the standpoint of business as well, I should say you could not do anything better for the public service and for the country than to formulate and enact a wise and generous retirement system for the civil servants of the Government. Mr. EDWARDS. Don't you think Congress should also provide a pension for retired Presidents of the United States? Mr. O'DONOGHUE. That is another story. They do not devote all their time to the service. It is only temporary. STATEMENT OF MRS. J. M. MONROE, VICE-PRESIDENT OF THE UNITED STATES CIVIL-SERVICE RETIREMENT ASSOCIATION. Mrs. MONROE. Mr. Chairman and gentlemen, in regard to the young people in the Government service, the idea is that the young people are opposed to any retirement bill. That is a mistake. You have not yet heard from them, because it is against the President's order that their wishes should be made known or communicated by them. I am the mother of two young men in the Government service. Those two young men are in favor of the retirement bill, and they say that unless a bill of that character is passed in the near future, and in case they get an opportunity, they will go out of the Government service and enter corporation service, because they will there be better provided for and will get a higher salary. Those two young men are in scientific branches of the service, where it is hard to get competent people. One of them is in the Geological Survey and another is an expert draftsman in the Navy Department. I am acquainted with a great many young men in the service, and I hardly know of one that is not in favor of a retirement bill. Of course they do not want to give up as much as 5 per cent of their salary, as I understand is provided by this bill; but anything under that they are willing to be assessed for. Our own bill of course was based on the theory that there would be no help whatever from the Government, and we simply yielded and gave way to the Keep Commission's report. Mr. EDWARDS. What salaries do your sons get? Mrs. MONROE. One gets $2,000 a year and the other $1,200. Mr. EDWARDS. And they would not be willing to stand an assessment of 5 per cent or more? Mrs. MONROE. Five per cent and under-anything up to 5 per cent. I know two young men who will be married next fall, and they said to me: "Mrs. Monroe, if the Government provides some retirement scheme for us we will stay in the Government service, but if not, we will go out." Mr. EDWARDS. I want to ask Mr. Naegle a question. Mr. Naegle, have you conferred with employees in different branches of the Government service as to whether or not they favor this plan and whether or not they will stand for a compulsory assessment of their salary of 5 per cent or more? Mr. NAEGLE. I have had correspondence with employees in the different parts of the Government service, and the answers I have got are to the effect that they are in favor of it. Mr. EDWARDS. What have you heard from the rural carriers on that? Mr. NAEGLE. Nothing at all. Mr. EDWARDS. It is a fact that their salaries are comparatively low, is it not, and that their expenses are proportionately heavy? Mr. NAEGLE. I do not know as to that. I do not know what their expenses are. Mr. EDWARDS. I will give you some information on that line. It is a fact that their expenses are heavy. I recently took pleasure in helping to increase the salaries of city letter carriers of the first class, and I hope to be able to help the rural carriers get an increase also. The CHAIRMAN. Now, Major Brackett, 12 o'clock has come and we are pressed for time. It is our intention to adjourn and conclude the hearing soon. STATEMENT OF MR. FRED BRACKETT, OF WASHINGTON, D. C. Mr. BRACKETT. I would like to have the committee understand that there has been no consultation between myself and the other gentlemen here who are representing the Retirement Association, neither have I ever had anything to do with the formation of the bill which is called the Brown bill. I had prepared some time ago a slight criticism of that bill, and as I know you want to get as near to the facts as possible, I will read this with your permission. It does not quite agree with the statements that have already been made here. Mr. EDWARDS. You are opposed to the bill, as I understand it? Mr. BRACKETT. No, sir. I want the best bill we can get. I have examined the bill for the retirement of civil-service employees, and report thereon prepared by the subcommittee on personnel of the Committee on Department Methods, and beg leave to transmit the following criticism thereof: Section 1. This section provides for the purchase of an annuity payable from the date a clerk arrives at age of retirement, "equal to it per cent of his annual salary, pay, or compensation for every full year of service, or major fraction thereof, between the date of the passage of this act and the arrival of the employee at age of retirement.' It is obvious that this provision can not be literally carried out except in the case of an employee whose salary, pay, or compensation will not be changed "between the date of the passage of this act and the arrival of the employee at the age of retirement. Mr. GILLETT. Why not, Major? Mr. BRACKETT. As he is promoted and his salary changed, he would desire a higher annuity. Under the terms of the act The CHAIRMAN. I do not see why not. Mr. BRACKETT. The section might properly be amended to read "an annuity for such amount as the officer or employee may elect to purchase at any time.' This would allow the beneficiary to increase his annuity at any time his salary might be increased. A 4 per cent interest basis for an annuity is too high. It is altogether improbable that more than 3 per cent interest could be earned. On this basis a larger deduction would have to be made every month than the amount stated by the Keep Commission. Section 2. Provides for keeping an account with every employee. This would be a stupendous task. Persons of different ages receiving the same salary, and persons of the same age receiving different salaries, will have deducted from their semimonthly pay different amounts, all of which would have to be certified to the disbursing clerk, with the probable result of vexatious delay in payments and the posting of individual accounts. At least 125,000 accounts would have to be kept. Section 6. Provides for groups 1, 2, and 3, to be composed of employees aged, respectively, at retirement, 60, 65, and 70 years of age. Section 7. Provides for annuities based upon the following percentages of salaries for each year of service: Group 1, 1 per cent; group 2, 1.25 per cent; and group 3, 1.5 per cent. I do not consider this an equitable provision, for there does not appear to be any good reason for making a difference of, say, $120 per annum in the pay of these three groups, when each of the employees may have served a like number of years, say forty, in which case a beneficiary in group 1 would receive (on a $1,200 salary) $480; in group 2, $600; and in group 3, $720. Then, too, an employee in group 3 would only need to serve twenty-six and two-thirds years to be entitled to the same retired pay as an employee in group 1 who had served forty years and as an employee of group 2 who had served thirty-two years. Note also that the group 2 employee would have eight years' advantage over the employee in group 1. The question as to whether it is advisable to provide for a retired pay exceeding 50 per cent of the average salary for those now in the service is one worthy of serious consideration, especially as it is proposed that the Government shall contribute a portion of the annuity in such cases. July 1, 1908, the youngest clerks listed in Census Bulletin No. 12 will be rated as follows: Less than 19 years old.. Who are 24 years old. I am dealing with the young clerks only. 12 20 49 112 386 946 1, 532 July 1, 1974, or, in sixty-six years, these clerks would be of follow ing ages; Say, 84 years old. Aged 85 years. Aged 86 years. Aged 87 years. Aged 88 years. Aged 90 years.. 12 20 49 112 386 946 1, 532 It is not likely, however, that any of these clerks will be living in 1974, but any of the clerks who are 25 years old in 1908 will probably live until 1953, retire at age 70, and draw retired pay for, say, nine years thereafter, or until 1962. The probability of life at the age of 70 is 8.48 years. I think there is a very slight probability that any of the present force will draw pay after 1962. Understand that a clerk must be in service in 1908 (under the proposed bill) in order to receive a Government annuity in addition to the one he pays for by personal contribution. Therefore, in estimating the cost to the Government, we have to base our calculations on the years' service rendered by each clerk prior to 1908. The aggregate of such service is (for clerks in classified list) 1,376,846 years. Allowing 11 per cent of average salary for each year's service we have a total of 17,211 per cent of average salary due to all clerks (under the bill) on July 1, 1908. The average salary paid clerks being $1,072, there would be due on said date, as the Government's share of the annuity, $18,450,192 per annum, provided all of the 124,737 clerks in service (as per Census Bulletin No. 12) live to be 70 and retire under the provisions of the Keep Commission bill. It is reasonable to expect a large reduction in the number given (124,737) by reason of resignations, removals, and deaths. The average retired salary (of the whole number) would be 147.91 to be paid by Government from the date of each clerk's retirement. As the year for retirement would not be identical for all clerks, the total liability of the Government would not have to be met in a single year, but in the whole period between July 1, 1908, and the day when the last clerk entitled to the benefit expires, say, in 1974, allowing a 50 per cent reduction in the estimated number of clerks who may live until entitled to retire with pay, and we have $9,225,096 per annum due to such clerks on July 1, 1908, and payable on their annuity whenever they retire. As the average expectation of life at age 70 is 8.48 years, we must multiply $9,225,096 by that sum, producing $78,228,814, provided they all retire at age 70 (more will be due if they retire at age 60 or 65 as they will live longer), that would prob |