postmaster refuses to certify either one of the substitutes to fill this permanent position. How could a situation like that exist?

Mr. MCMILLAN. There are longtime instructions to the field, Mr. Chairman, that, if they have a regular position available on the 8-in10-hour basis, they must convert to regular. Incidentally, I have just been reminded we now have 8,500 vacancies in the regular force, and we are now in process of making the conversions to fill these vacancies out of the ranks of regular subs on the rolls to some extent.

Mr. STEED. Can a local postmaster deliberately refuse to fill a permanent position that has been vacant over a year?

Mr. MCMILLAN. If it comes to our attention, we will tell him to fill it.

Mr. STEED. I just happen to know about that. It came to my attention last weekend, as a matter of fact. If a local postmaster can maintain a situation like that, you never would get this thing licked. Not without their cooperation.

Mr. GRONOUSKI. Ordinarily when these situations exist they come to our attention either through the clerk or carrier organizations or through Congressmen or third parties, or one of the parties involved. I don't know what this case is.

Mr. STEED. I have no way of knowing whether it is true or not, but I was told the postmaster has a personal feeling about both these subs and therefore has just refused to certify either one of them.

Mr. GRONOUSKI. It is a large organization. Occasionally a postmaster does not follow our directions quite as well as I would like him to. But ordinarily they follow them pretty well. While you will get some of these pockets of resistance, overall the program goes forward.

Mr. STEED. While I know this represents only a single job in a little office, if it reflects a situation generally throughout the Department you could have a great many regular positions that could be filled, have been allocated and should be filled, and are not. It would make your figures go out of balance pretty badly.

Mr. MCMILLAN. I would assume, Mr. Chairman, in some small offices, since July 1, where they have a vacancy they may be treading water, so to speak, to see what impact the sectional center has on their flow of mail. But if this vacancy has existed for any length of time and the 8-in-10-hour necessity is there, there is no reason in the world why it should not be filled, and that is what we told them to do.

Mr. STEED. It has been this way for more than a year, I was told, and it has always been a permanent position in the office. The person who held it retired and no action was ever taken to fill it again.

Mr. MCMILLAN. If you care to give us the name of the office, we will be glad to look into it.

Mr. STEED. I am just trying to see if this is a general situation you are confronted with that would slow down your conversion. Our interest is mostly in the conversion program itself.

Mr. GRONOUSKI. I have no doubt the conversion of 20,000 temporaries to career will happen this year. I have no doubt in my mind about it.

Mr. STEED. We certainly hope so. I think that is one of the bad problems you have had this out-of-balance temporary sub situation.

Mr. GRONOUSKI. Yes, that and the other problem that has been even. more serious, which you helped to correct with the 8,896 additional people, is excessive overtime.

REDUCTION IN OVERTIME

Mr. STEED. In connection with that, you mentioned you have had somewhere between 14 and 15 percent reduction in overtime already. Is that the maximum you expect to be able to achieve?

Mr. MCMILLAN. No, sir. We will reduce it to a considerably greater extent than that.

Mr. GRONOUSKI. One reason we have moved so fast on it is that it happened to come in the summertime when we were able to hire these students rather quickly. Otherwise we could not have made that kind of reduction. Most of these students are either replacing regular employees who are on vacations or they are replacing overtime hours. Mr. STEED. Does the 14 percent give you enough coverage to eliminate all of these excessive overtime situations-70 and 80 and 90 hours a week?

Mr. GRONOUSKI. The reports I have gotten since I issued the order shortly after the appropriation for the 56-hour maximum have been that it has been pretty well lived up to around the country. We have had very few complaints on it.

Mr. STEED. If you had an 80-hour situation still existing after the allowances we made for you in this budget, what would cause that? Why couldn't you have eliminated that entirely?

Mr. GRONOUSKI. I don't think we have it in existence.

Mr. MCMILLAN. Over 80 hours?

Mr. STEED. The situation where somebody was working 80 hours a week.

Mr. MCMILLAN. We have made a substantial reduction on that, Mr. Chairman. In the first two periods of this year we have reduced the number of substitutes working excessive hours by over 2,400 people. Ultimately we expect to reduce overtime hours by 40 percent. Now it is 14.5 percent as of the first accounting period.

Mr. STEED. Give me a reason why, with this additional help, there would be an occasion why anyone would be working 80 hours a week. Mr. MCMILLAN. One of the reasons, as I explained a moment ago, is that it takes a little time to get these people on the rolls. You can't just get them on the next day. And our summer employees, as the Postmaster General pointed out, have been used primarily for replacing people on vacations and to the extent possible

Mr. STEED. You do feel that in a reasonable amount of time all of those excessive overtime situations will be wiped out?

Mr. GRONOUSKI. I think practically all of them have been wiped out. Mr. MCMILLAN. We have a table here. There is still more than we would like to have, but it has been sharply reduced. As soon as we are able to get all the people on the rolls that have been allocated, we hope to get within the 48 hours per week for substitute employees.

Mr. STEED. I certainly hope so. I think that will be a wonderful improvement in the situation.

CONVERSION OF TEMPORARY EMPLOYEES

You are now talking about the 20,000 conversions you feel like you will be able to accomplish this year. What will you have left to be done in that area?

Mr. GRONOUSKI. We have 16,000 or 17,000 rural carrier substitutes, and you would never eliminate those. Then you have your third-class offices, substitutes that work a couple of hours a day, or something of that sort. Again, you would never convert those because there isn't that kind of work.

Mr. STEED. I know there is a number of situations around the country that will always require temporaries and subs. It would be impossible to eliminate them all. But we were talking in terms of those situations where conversion can be made and should be made, and we hoped we had started with you this year to make these conversions and to continue until all of the conversions that should be made have been. made. I am trying to get an idea how much more we have left after this.

Mr. GRONOUSKI. I have to make another point, though: Actually, the repeal of the Whitten rider was more important from the conversion point of view than the matter of appropriations. The appropriation allowed for almost 9,000 more employees and had the direct effect of providing us with the number of additional people to absorb excess overtime, and was really not directly on this question of temporary versus sub versus regular. What was limiting us on that matter was really the Whitten amendment, which did not permit us to increase our career staff as we ought to have done. But if we convert these 20,000 this year-and I am sure we will-we will have taken care of the worst cases of using temps where we ought to be using career subs and regulars.

Mr. MCMILLAN. We have a total of 59,000 temps on our rolls now; 14,000 of these are in third-class offices that we can't do anything about, particularly with the 5-day week for postmasters coming in. That leaves us 45,000 in the larger post offices we need to work on. Mr. MURPHY. And 15,000 are rural carriers substitutes who work 1 or 2 days a month, or something less.

Mr. GRONOUSKI. So the 45,000 is cut down to 30,000.

Mr. MCMILLAN. And we think 20,000 of those is about as low as we can reduce; 10,000 actually work in the larger post offices. Mr. STEED. You foresee, then, in the future the ability hold around that level?

Mr. MCMILLAN. Yes, sir.

Mr. STEED. I think this is important. As you know, legislation is currently under consideration to require payment of time and a half for overtime regardless of who works it. I think you have proved very clearly that you get the most for your overtime from your career people, and because of their greater skill you just get more for your money. Since you are likely to be faced with the situation where you are going to have to pay time and a half in any event, it would seem to me the advantages will be all in favor of having as many career people as possible

Mr. GRONOUSKI. I agree with you, Mr. Chairman.

Mr. STEED. It is going to cost you the same amount of money, whichever you use.

Mr. GRONOUSKI. That is why-right after the Whitten rider was adjusted so that we were excluded from it, that is why we immediately put into motion the program to convert 20,000 temps to career. I might say this was partly because of the obvious bad practice of working people exessively long hours, and partly because of our realization that time and a half for overtime was obviously going to come to the postal service in the sub categories. That is why we were so interested this year in getting additional employees to reduce overtime, and ultimately it seems to me the best business practice, or the best labor practice, in the Department would be to have sufficient employees so the normal workweek would be 40 hours and not on an overtime basis. It would be the best business practice, both from the point of view of stabilizing the workweek of the employees, and also in terms of cost, because once you get time and a half for overtime it costs you more money. So I would hope that next year at the time we review the budget and look at the needs of the Department we would do our best to think in terms of sufficient personnel to maintain 40 hours a week and only use the overtime, as I think it should be used, in those cases where it is more efficient to use overtime. You can never eliminate it all, but I think you should eliminate most of it, particularly now with the time-and-a-half proposition.

OVERTIME VERSUS INCREASE IN NUMBER OF EMPLOYEES

Mr. STEED. In your supplemental here, what do you anticipate will be the situation? Will you use this money to put more hours on the people you already have or will you use it to put on more bodies?

Mr. GRONOUSKI. From the point of view of personnel, what we would end up doing is increase the number of employees. It would add about 5,000 employees for the 5-day week for postmasters. We have to add additional clerk hours on Saturdays to relieve the postmasters. And in the case of the $32 million, 8,200 additional employees would be added to the staff.

Mr. STEED. Does that mean most of this would go in extra bodies and not just extra hours for the personnel you already have?

Mr. GRONOUSKI. The idea is to put it all in extra bodies. In other words, put them on a 40-hour week.

Mr. MCMILLAN. You will notice, Mr. Chairman, we are asking for 13.200 extra bodies as against 6,784 man-years. So this tends to reduce the work hours for the individuals.

RATIO OF SUBSTITUTES TO REGULAR EMPLOYEES

Before we get away from the temporaries, I would like to comment there is another factor that affects our ability to reduce temporary employees, and that is the 1 to 5 ratio we are tied to. In other words, you cannot have more than one sub to five regulars. When you get all of the regulars on that you can schedule on a regular basis, 8 in 10 hours, you can allocate one sub to each five. Now, this is nationwide. Then if you still need people, still haven't got enough people to take care of your workload, the only thing you can do is to put on tem

poraries. So as long as this law is on the books in this form we cannot completely eliminate temporaries.

Mr. STEED. That 5 to 1 ratio is by statute and not by your own choice?

Mr. MCMILLAN. It is by statute, and it is nationwide. Fortunately, that does give us a little leeway.

Mr. COHELAN. Have you made any recommendations, General, to eliminate some of these rigidities that are so obviously affecting your manning?

Mr. GRONOUSKI. On the ratio of subs to regulars, we have had many discussions over the last couple of years with our employee unions. We haven't come in with a bill at this point.

Mr. COHELAN. What exactly is the problem? Just so I will understand it. What is the rationale of this rigidity that obviously affects your employment practices?

Mr. GRONOUSKI. The most serious problem is not having enough manpower to eliminate overtime hours. That is the No. 1 most serious problem. We are making an attack on this problem this year with these 8,896 positions. I think next year we are going to have to go the rest of the way. That is the No. 1 problem.

With respect to the 5 to 1 ratio of regulars to subs, I think I would rather have Mr. McMillan comment on that.

Mr. MCMILLAN. Of course, this law has been on the statute books for a long time. We would much rather see a 4 to 1 ratio, but it involves a lot of things. I don't believe that we have actually proposed a bill. There was some discussion about it this year. We were hopeful that the elimination of the Whitten rider and the provision of the extra bodies that you gentlemen put in our bill would alleviate the situation. But nevertheless this is a factor that does preclude us from eliminating temporaries entirely. You just can't do it in all post offices and stay within the law.

Mr. GRONOUSKI. In other words, the temporaries are outside this 5 to 1 ratio, and it gives additional flexibility.

Mr. COHELAN. To put it another way, the 5 to 1 ratio compels you to operate that way?

Mr. BELEN. I might point out we have a 6-day week operation as a minimum usually a 7-day week. When you take that, plus vacations, you have to have some replacements. If you had a 5-day week operation you could get along. In fact, in 1961 we had 100,000 temporaries, due in large part because of this difficulty and because it is difficult for a manager to try and work out a very nice, neat work schedule so you have the maximum number of regulars in ratio to substitutes. We have given attention to this, and we have really worked at getting these schedules worked out. But it was much simpler just to put on the temporaries, which is what they did. There were 100,000 in 1961. Mr. STEED. When a thing like this gives such a problem under the type of operation you have, what is the justification for it? It sounds like to me you are just putting yourself in a straitjacket.

Mr. MURPHY. The limitation actually was originally placed into the law primarily at the insistence of the employee organizations, and the purpose was to try to prevent the Post Office Department from having a large number of substitutes in relation to the total number