Senator CARLSON. Well, Mr. Chairman, I just want to pursue that a little bit, because after all, Congress substantially increased postal revenues by increasing the costs of carrying the mails to postal patrons. How much increased revenue did you get as a result of the last increase in first, second, and third and fourth class?

Mr. MURPHY. I think it was about $600 million roughly, for 1964, Senator. Plus an allowance for public service.

The CHAIRMAN. Does that take into account its increase of rates of fourth-class mail that is regulated by ICC?

Mr. MURPHY. Well, plus the parcel post rate increase, which I think increased about $70 million ultimately.

Mr. Winchel, do you have that figure?

I am told it is about $70 million.

Senator CARLSON. Anyway, $600 million plus

Mr. MURPHY. Around $70 million additional for the ICC parcel post rate increases.

Senator CARLSON. And then we add 400-and-some million dollars for public service?

Mr. MURPHY. I think the figure runs close to that under the new formula for computing public service. The figure for 1963 was $412 million. For 1965, it will be $463 million.

Senator CARLSON. Well, my only point I wanted to bring up was that I get mail from some people who complain that we increased the rates, and you curtailed service. What about the curtailment of postal service? What are you doing?

Mr. MURPHY. Just to add one thing to your figure, there, Senator Carlson, at the same time that we increased the rates by that much, we also increased the postal pay in the salary reform act of 1962 by $390 million, based on this year's figures, and, of course, H.R. 11049 would propose to increase the postal pay by another $235 million, so that has to be added into our computations when we are also computing this additional amount received from revenue. Insofar as the service is concerned, I think

Senator CARLSON. Before you do that, might I inquire if this $235 million is for a 6-month period or a year?

Mr. MURPHY. That is a full year. A fiscal year period, Senator. The complaints that you are undoubtedly receiving, right now, especially in this particular week, are those that have come about as a result of certain limited service adjustments that were made during last week. As a matter of fact, that was the first week, so you are probably hearing more about it now than you would at any other time. They are economies that we feel we have to make in the postal service, if we are to do what our part is in trying to hold down expenditures and to comply with what the President wishes us to do, and that is to have stringent economy in all services of the Government, and to do only those things that we feel we absolutely must do without cutting any essential services. These adjustments apply to the delivery of parcel post on exclusively parcel post routes on a 5-day-week basis. This accounts for some 16,000 routes out of approximately some 160,000 routes, throughout the country. It also applies to the limitation of window service to a half a day on Saturday, where in some areas, they have been providing more than a half day on Saturday, and it also applies to the nonissuance of money orders on

Saturday in post offices where additional clerk hire has to be made for that specific purpose.

It would not affect, of course, fourth-class offices, third-class offices, or the issuance of money orders on rural routes or in contract stations. These are the service adjustments that we have made, which all together will save around $12.7 million in this fiscal year, which as you can see, is not a great saving, but it is a saving that represents, nonetheless, a substantial sum of money that we feel shows that we are going to do everything possible to try to cut out those things that are nice-to-have services, but not absolutely essential services, and to try to run the Post Office Department on a lean and efficient basis.

At the same time, we have held down increases in postal employment considerably, and we now are operating with about 42,000 less employees on the rolls than we would have had if we had followed the projections that were made for the next 5-year period in 1960; 42,000 less employees would represent a considerable sum of money that we are saving.

Senator CARLSON. Well, I appreciate very much that statement in regard to the situation. I think all of us are in favor of trying to work out an economical operation. At the same time, I wanted to check, because I have been somewhat familiar with the past budgets submitted to Congress, and I noticed when we had 50 billion pieces of mail, we always asked for an increase of personnel, 60 billion, and now this year, you are about 70 billion, I assume.

Mr. MURPHY. 72 billion for the next fiscal year.

Senator CARLSON. 72 billion pieces, and you expect to handle that with less employees than you had on a percentage of previous mail handled?

Mr. MURPHY. No, sir; actually, the President's budget calls for an increase of about 4,000 employees during fiscal year 1965. Mr. Gronouski told the President in January of this year that we would make every effort to reduce our total employment by 5,000 in this fiscal year, and we are right on target in meeting that goal. We have worked awfully hard to do it, believe me, but we are down to, or will be down to 590,000 employees on June 30. But the new budget does provide for gradual expansion and build up to accord with the increasing mail volume of about 4,000 4,780 additional employees during the fiscal year 1965.

The CHAIRMAN. That is less than a 1-percent increase.

Mr. MURPHY. Yes.

The CHAIRMAN. And with the mail volume of increase of somewhere around 4, 3 to 4 percent?

Mr. MURPHY. A little over 3 percent.

Senator CARLSON. Well, Mr. Chairman, I shall pursue this some other time.

The CHAIRMAN. Since the Senate has just gone into session I think we had better have you come back Thursday morning, and you can complete your testimony. I know that there are more questions to be put to you.

We are going to have Mr. Jerome Keating here then. Are the other agencies agreed on the presentation?

Mr. KEATING. Yes. I will present a statement for a number of groups.

The CHAIRMAN. That will be fine. We will be back Thursday at 9 o'clock.

The statement of Louis S. Damiani, legislative representative of the Panama Canal Zone Central Labor Union & Metal Trades Council, AFL-CIO, will be placed in the record at this point. I would like to take notice that Mr. Damiani, like so many other representatives of groups, has kindly agreed to present his statement for inclusion rather than to take the time of the committee. You all know that we are operating under somewhat of a handicap as far as time is concerned.

(The statement of Mr. Damiani is as follows:)

STATEMENT OF LOUIS S. DAMIANI, LEGISLATIVE REPRESENTATIVE OF THE PANAMA CANAL ZONE CENTRAL LABOR UNION & METAL TRADES COUNCIL AFL-CIO

Mr. Chairman, and members of the committee, as the employee representative of the U.S. citizen employees of the Panama Canal Company-Government, I wish to thank the committee for this opportunity of voicing our general support of the legislation pending before this committee.

The 30 affiliates whom I represent endorse and support fully enactment of legislation which will upwardly adjust the rates of basic compensation in the Federal Government salary structure for officers and employees in the classified, postal, executive, congressional, and judicial branches of our Government.

The Canal Zone Central Labor Union & Metal Trades Council unanimously supports the position and views expressed by the Government Employees Council, AFL-CIO, before the committee this morning.

It is our conviction, that before legislation can or will achieve the objectives of the salary policies of the Federal Salary Reform Act of 1962 (pay rates of the Federal statutory salary systems shall be comparable with rates paid for same levels of work in private enterprise) favorable consideration of amending the legislation granting no less than 3-percent salary increases of entrance rates be granted for grades 7 through 12 of the classification schedule.

Further, the glaring inequity of a supervisory official receiving a salary lower than many of his subordinates does not appear to be predicated on the basis of comparability, responsibility, skill, and performance. We urge the consideration by the committee of remedial measures which appear to be merited and justified.

Enactment of this legislation, incorporating the amendments presented by employee representatives, will be conclusive evidence to all that our Congress has basically adopted the eminently fair and appropriate principle of comparability for the Federal service.

I thank the committee for their time, and I shall be happy to answer any of the committee's questions.

(Whereupon, at 10 a.m., the hearing was adjourned, to reconvene at 9 a.m., Thursday, May 14, 1964.)

FEDERAL PAY LEGISLATION

THURSDAY, MAY 14, 1964

U.S. SENATE,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE, Washington, D.C. The committee met at 9 a.m., pursuant to call, in room 6202, New Senate Office Building, Senator Olin D. Johnston (chairman of the committee) presiding.

Present: Senators Johnston, Monroney, Yarborough, Randolph, McGee, Fong, and Boggs.

Also present: William P. Gulledge, staff director and counsel; Richard Fuller, professional staff member; David Minton, staff member; and Frank A. Paschal, minority clerk.

The CHAIRMAN. The committee will come to order.

This hearing is convened so that the committee may continue to hear testimony on Federal pay adjustment legislation.

I am advised that, following a series of meetings, Mr. Jerome J. Keating, president of the National Association of Letter Carriers, has been authorized to testify for a number of employee organizations. Therefore, in the interest of conserving time, Mr. Keating has been scheduled as today's first witness.

The Honorable Richard J. Murphy, Assistant Postmaster General for Personnel, has kindly consented to defer his testimony until 9:30 a.m. Mr. Murphy was not able to complete his testimony at our last hearing and the information he so ably provided is very helpful to us. I know that Mr. Keating's views will also be helpful. Jerry, will you please proceed?

STATEMENT OF JEROME J. KEATING, PRESIDENT, NATIONAL ASSOCIATION OF LETTER CARRIERS, ON BEHALF OF THE GOVERNMENT EMPLOYEES COUNCIL, AFL-CIO; ACCOMPANIED BY JOHN F. GRINER, PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; ALBERT RAEDER, ASSISTANT RESEARCH DIRECTOR, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS; JOHN F. O'CONNOR, LEGISLATIVE REPRESENTATIVE, UNITED FEDERATION OF POSTAL CLERKS; HAROLD MCAVOY, PRESIDENT, NATIONAL ASSOCIATION OF POST OFFICE & POSTAL TRANSPORTATION SERVICE MAIL HANDLERS, WATCHMEN & MESSENGERS; AND EVERETT G. GIBSON, PRESIDENT, NATIONAL FEDERATION OF POST OFFICE MOTOR VEHICLE EMPLOYEES

Mr. KEATING. Thank you, Senator.

Mr. Chairman and members of the committee, my name is Jerome J. Keating. I am president of the National Association of Letter

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