INCREASE SALARIES OF REFEREES IN BANKRUPTCY 3 general question of compensation for the referees in bankruptcy. The Judicial Conference at its March session further directed that all views expressed be communicated to the committee on bankruptcy administration of the conference for its consideration and that the committee make further report to the conference at its next regular meeting. The committee on bankruptcy administration of which Chief Judge Orie L. Phillips of Denver, Colo., is chairman, met on July 30, 1951. It had before it the letters expressing the views of the district judges and the circuit conferences so far as they had acted upon the question. The committee was of the opinion that in view of the steady increase in the cost of living since the establishment in 1947 of the salary system for compensating referees, especially in the metropolitan areas where many of the full-time referees are located, the maximum limits upon the salaries of referees should be raised. The committee considered, however, that there were a number of districts in which it was desirable to provide full-time referees as at present but in which conditions would not warrant the maximum salary and in which competent referees would be willing to accept full-time appointments at less than the maximum. Consequently it would not favor a fixed salary for all full-time referees as it felt that a fixed salary would destroy the flexibility of the present system and would be likely to increase unduly the cost of the system. The chairman of the committee reported to the Judicial Conference at its regular session held in Washington on September 24 to 26, 1951, that the committee preferred the Byrne bill (II. R. 1651) and recommended its approval with an amendment fixing the maximum salary for full-time referees at $12,500 and for part-time referees at $6,000, both to be fixed by the Judicial Conference of the United States as under the present law. The conference approved the recommendation. So far as I am informed no bill has been introduced in the Senate embodying specifically the provisions of H. R. 1651 introduced by Congressman Byrne in the House of Representatives. I enclose a draft of a bill embodying the provisions recommended by the Judicial Conference. Should hearings be held on any of these bills we would be pleased to furnish any information we can to your committee. Sincerely yours, ELMORE WHITEHURST, Assistant Director. Hon. PAT MCCARRAN, DEPARTMENT OF JUSTICE, OFFICE OF THE DEPUTY ATTORNEY GENERAL, Chairman, Committee on the Judiciary, United States Senate, Washington, D. C. MY DEAR SENATOR: This is in response to your request for the views of the. Department of Justice concerning the bill (S. 2240) to amend section 40 of the Bankruptcy Act, so as to increase and fix the salary of full-time referees and to authorize increased salaries for part-time referees. Section 40 of the Bankruptcy Act (11 U. S. C. 68) provides that the salaries of referees shall be fixed by the Judicial Conference at rates of not more than $10,000 per annum for full-time referees and not more than $5,000 per annum for part-time referees. It also provides that during the tenure of any full-time referee, his salary shall not be reduced below that at which he was originally appointed nor changed more often than once in any 2 years or in an amount of less than $250. The bill would amend section 40 so as to fix the salaries of all full-time referees at $12,500 per annum, and increase the maximum salary limitation for part-time referees to $6,500. Whether legislation to increase the salaries of referees in bankruptcy should be enacted involves a question of policy concerning which this Department prefers not to make any recommendation. There would appear to be some question, however, as to the wisdom of placing all full-time referees on the same salary level and depriving the Judicial Conference of its present power to fix the salary at a rate lower than a certain maximum when conditions seem to so require. The annual report of the Director of the Administrative Office of the United States Courts for the fiscal year 1951 states that at the end of that year there were 79-956 O-77 - pt.2 - 27 4 INCREASE SALARIES OF REFEREES IN BANKRUPTCY 55 full-time referees of whom approximately two-thirds received the maximum salary of $10,000. It would appear that since approximately one-third of these positions were not then considered deserving of the maximum salary, this proportion might be even larger should the salary be increased to $12,500. While this Department would have no objection to increasing the maximum salary of fulltime referees to $12,500, it would seem advisable to retain the present provision of section 40 authorizing the Judicial Conference to fix the salary within that limitation rather than to require that all should be paid the same salary. It is assumed that the committee has obtained the views of the Administrative Office of the United States Courts concerning the measure. The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely, A. DEVITT VANECH, Attached hereto and made a part of this report is the following statistical information furnished by the Administrative Office of the United States Courts: 1. Statement of receipts and disbursements from the referees' salary and expense funds from July 1, 1947, through May 31, 1952. 2. Estimate of the cost of the proposed changes in referees' compensation. 3. Salary increases under the various Federal Pay Acts since 1946 in grades comparable to the maximum salaries provided for part-time and full-time referees. 4. Present salaries of referees tabulated by circuits. Bankr pulcy Statement of receipts and disbursements from July 1, 1947, through May 31, 1952 INCREASE SALARIES OF REFEREES IN BANKRUPTCY Referees' salary fund--Statement of receipts and disbursements FISCAL YEAR 1948 Advancement from Treasury general fund. Total receipts for year.- 5 $350, OCO 643, 190 993, 190 732, 694 260, 496 350, 000 -89, 504 FISCAL YEAR 1949 Cash balance on hand June 30, 1948.. Deduct Treasury advancement, 1948... Operating deficit, fiscal year 1948.......... Cash balance, June 30, 1948, carried forward. Total receipts for year. Salary payments, fiscal year 1949. Balance... Repayment to Tresaury general fund. Cash balance on hand June 30, 1949. Deduct Treasury advancement, 1948 (unpaid). Net balance, fiscal year 1949--- FISCAL YEAR 1950 Cash balance, June 30, 1949, carried forward.. Total receipts for year. Balance Repayments to Treasury general fund.. Cash balance on hand, June 30, 1950. Deduct Treasury advancement, 1948 (unpaid). Net balance, end of fiscal year 1950..-- FISCAL YEAR 1951 Cash balance, June 30, 1950, carried forward. Total receipts for year. Salary payments, fiscal year 1951.......... Balance Repayments to Treasury general fund.. FIRST 11 MONTHS, FISCAL YEAR 1952 Cash balance on hand, June 30, 1951. Cash balance, June 30, 1951, carried forward__ Total receipts... Salary payments (11 months) Cash balance on hand, May 31, 1952............. 884, 978 1, 157, 988 2,042, 966 1 804, 000 1,238, 966 6 INCREASE SALARIES OF REFEREES IN BANKRUPTCY Referees' expense fund-Statement of receipts and disbursements INCREASE SALARIES OF REFEREES IN BANKRUPTCY Referees' expense fund-Statement of receipts and disbursements--Continued FIRST 11 MONTHS FISCAL YEAR 1952 Cash balance, June 30, 1951, carried forward.... 7 $747, 258 1, 165, 933 1,933, 191 1990, 000 1923, 191 RECAPITULATION OF NET BALANCES Net balance referees' salary fund. Total cash balance in both funds... Estimated. 1 1, 238, 966 1923, 191 12, 162, 157 ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS Washington 13. D. C., June 16, 1952 ESTIMATE OF THE COST OF THE PROPOSED CHANGES IN REFEREES' COMPENSATION Giving effect to the salary increases and changes for referees in bankruptcy approved by the Judicial Conference of the United States at a special meeting held in Washington on March 19 to 20. 1952, effective April 1, 1952, the salaries authorized total $876 800 per annum. There are now 55 full-time and 108 parttime positions, a total of 163. Of the 55 full-time referees, 36 now receive the maximum salary of $10,000 per annum and 11 receive salaries of $9.000 Included in the remaining full-time positions are 6 at $7.500; 1 at $7.000 and 1 at $6.500 per annum. The total cost of all full-time positions is now $517.500. Of the 108 part-time referces. 34 now receive the maximum part-time salary of $5,000 per annum. The remaining 74 part-time positions carry salaries ranging from $500 to $4,500 per annum. The total cost of all part-time positions is now $359,300 Payments into and disbursements from the referees' salary fund since the establishment of the salary system and the income and estimated disbursements for the first 11 months of the fiscal year 1952 are as follows: Inasmuch as the bill passed by the Senate (S. 2210, 82d Cong., 2d sess.) still leaves in the Judicial Conference the determination of the salaries to be paid, it is difficult to give a define estimate of the cost. Based on the following assumptions the cost would be: 1. Assu. ing a straight percentage increase throughout the system for all fulltime positions and for all part-time positions of 20 percent, the total cost would then be $1,052,160 or an increase of $175,360. 2. Assuming a straight percentage increase throughout the system for all full-time positions and for all part-time positions of 25 percent, the total cost would then be $1,090,000 or an increase of $219,200. |