VOL. XXXIII

WASHINGTON, D. C., MARCH, 1920

MR. STERLING. Mr. President, I move that the Senate proceed to the consideration of the bill (S. 1699) for the retirement of employees in the classified civil service, and for other purposes.

MR. POMERENE. Mr. President, I hope that the motion will not prevail. I have been very much in favor of a retirement plan

MR. STERLING. Will the Senator permit an interruption?

MR. POMERENE. Certainly.

MR. STERLING. I appreciate the Senator's position and the importance of the work in which he is engaged. If the Senator will allow the motion to prevail, or will not object to the motion, I will, after the reading of the bill, consent that it may be temporarily laid aside and not proceed with the discussion of the bill today.

MR. POMERENE. I am not sure that that is going to be of very much assistance to me. The Senator is aware that the conferees on the railway legislation have been in daily session six days in the week for some time. Possibly there were one or two adjournments of one day for some special reason. It is more than important that the proposed railway legislation should be disposed of. Notice has been given by the President that the railroads will be turned back March 1. I am sorry that they were not turned back March 1, 1919. The conferees of the Senate and House are doing everything they can to adjust the differences between the two Houses, and I would feel that I was negligent in my duty if I did not give practically my

entire time to that railroad legislation until we get it in the form of a report to be presented to the Senate.

I know that the Senator from Iowa (Mr. Cummins), the distinguished chairman of the Committee on Interstate Commerce, is also very much interested in retirement legislation. Years ago he was the chairman of the Committee on Civil Service and Retrenchment and prepared and presented to the Senate a bill on the subject. Later I succeeeded him as chairman of that committee, and, after a good deal of thought, another retirement measure was prepared and presented. I think I am within the bounds of truth when I say that the Senator from Iowa also is very anxious to be on the floor, so that he may take a part in the discussion of the bill.

I am not opposed to a retirement plan. I am just as much in favor of a retirement plan as is the present distinguished chairman of the committee, but I am opposed to his plan, and I think the majority of the Senate will be opposed to that plan when they realize how tremendous the cost is going to be.

I am not questioning the diligence or the good faith of the committee, but I am satisfied they have been grossly deceived by some of the testimony which was presented to the committee touching the question of the cost of the bill. I expect when we get to the discussion of the bill to demonstrate, I think, conclusively, what it is going to cost the Government. Beginning with about six or seven million dollars a year, it will reach the peak within about 30 years, when it will cost $35,500,000, or thereabouts, a year, and then it will gradually decline until it reaches a level of $28,500,000 a year; but the high cost of the bill has been kept in the background by the experts who have come before the committee.

I want to be on the floor of the Senate when the bill is being discussed, but I can not be here if I am to do my duty as a member of the conference committee having under consideration the railroad legislation. If the retirement bill can go over until next week or until such time as we shall have completed our work as members of the conference committee, I shall join with the Senator from South Dakota in helping to bring up the bill, for it is a question that ought to be settled. However, because of these conflicting engagements, I hope the Senate will not order the taking up of the bill now. Whatever view we may take of this subject, Senators ought to be informed upon it; and I am satisfied, knowing as I do the many engagements that Senators have, they are compelled to depend to a certain degree upon the diligence, the work, and the conclusions of the committee that has special charge of the bill.

Of course, in what I am saying, I do not mean in the slightest degree to cast any

No. 3

reflection upon any member of the Com. mittee on Civil Service Retrenchment; all of the members of that committee are my personal friends, for whom I have the highest regard personally and officially; but I hope the Senator from South Dakota will not insist on having the bill taken up at this time.

MR. STERLING. Mr. President, this bill has been on the calendar a long time. It is No. 89 on the calendar. It was believed that it should have been considered by the Senate long before this, but the steering committee arranged to take up bills following this bill on the calendar, and. in their judgment, it was deemed proper that those bills should be first considered. I yielded to that decision without any complaint or objection.

Mr. President, this is an important bill. There is urgent need for civil service retirement legislation, and there has been for a long time. Our own great Government is the only civilized government in all the world, I think, that has not some civil service retirement system, and it is to the reproach of the United States that it has not before this time adopted some just. equitable, and fair system; one that would be just to the employees; one that would be just to the Government itself; and one that would be just to the public, which, after all, is the party that is most interested. In view of the importance of this legislation, and in view of the fact that it has been delayed and put aside for other legislation, I feel that the bill should be now considered.

Mr. President, always, in the proceedings of the Senate, Senators will be on important committees considering important bills: Senators will be on important conferences considering bills that have passed the House. Must important legislation halt and wait for the release of Members who serve on committees until their work is done, the time when that work will be completed being altogether indefinite and uncertain? I can not quite agree with that proposition, much as I should like to accommodate my friend, the Senator from Ohio (Mr. Pomerene) or the Senator from Utah (Mr. Smoot) or the Senator from Iowa (Mr. Cummins), all of whom have manifested an interest in civil service retirement legislation.

Further, Mr. President, the Senator from Ohio, in his opposition to the motion to take up the bill, anticipates some of the very issues of the bill and discusses them here on the floor at this time. I desire to say that I think the Senator from Ohio has been wrongly advised in regard to the cost of this legislation to the Government of the United States, as I think we shall be able to show.

MR. POMERENE. If the distinguished chairman of the committee or any other member of the committee can show that I have been wrongly advised, I shall be only too glad to change front. I want to be right about this matter, as I am satisfied the Senator does.

MR. STERLING. Certainly.

MR. STERLING. Certainly.

MR. SMOOT. But the Senator knows that the Senator from Iowa (Mr. Cummins), who was chairman of the Committee on Civil Service and Retrenchment for a number of years, and myself spent days and weeks in the consideration of a retirement bill which we reported to the Senate, but to which the Senate failed to give consideration. I was also a member of that committee at the time the Senator from Ohio was its chairman, and I think the Senator from Ohio will bear me out in saying that we gave days and weeks to the consideration of the same subject matter. Then, as time proceeded, other bills have been considered by the same committee. . I know that the Senator from Iowa is deeply interested in this proposed legislation; I know that he desires to be present when it is considered. Of course, if the bill before the conference committee were merely an ordinary measure no member of that committee could come before the Senate and ask that the proceedings of the Senate upon any such measure should be postponed or deferred to suit his convenience, but the railroad bill has got to become a law if the railroads are to be turned back to their owners by March 1. It is very doubtful whether, even if the committee should agree on a conference report by the middle of next week, we should be able to get the report through the House, through the Senate, and signed by the President in time to have the railroads turned over by the 1st of March.

MR. STERLING. Mr. President, if the Senator will permit me, he now discloses the true situation; first, that it is indefinite as to when the work of the conferees on the railroad bill will be concluded; and, secondly, that there will be indefinite discussion after the report of the conference committee is submitted.

MR. SMOOT. The Senator knows that when the conference report goes to the House it will lie over for a day, and no doubt will be discussed in the House for some time. I do not expect that there will be very much discussion of the conference report in the Senate, and, so far as I am concerned, I will say to the Senator that during that time I shall assist him in getting the retirement bill before the Senate for consideration; but I really think that the bill ought to go over at least until next week, so that the members of the conference committee on the railroad bill can be present when the bill is taken up and discussed.

MR. MCCORMICK. Mr. President, as a Senator who has no such immediate interest in this bill as any of those who have taken part in the discussion, I submit that, at a time like this, unless a measure of this kind may be made the unfinished business upon the motion of the Senator who is responsible for it, it may very well be put over again and again. The Senate will never dispatch any business at that rate. There are conferences continuing now or pending which will occupy the time of other Senators even three weeks from now when the Senator from Ohio has concluded his labors upon the great railroad bill.

MR. POMERENE. Mr. President. in a general way that is true, but I think that the distinguished Senator from Illinois will agree with me that it is especially important that the railroad legislation be gotten behind us.

MR. MCCORMICK. Mr. President, I agree with the Senator, but let me say that the Senator from South Dakota has offered, if the Senator from Ohio will permit him to get this bill before the Senate, to ask unanimous consent that it be temporarily laid aside. There are two or three other Senators on the floor now who have other measures which they wish to bring before the Senate.

MR. POMERENE. As I understand the suggestion of the Senator from South Dakota, it is to lay the bill over until tomorrow. so that there will be no discussion today. My own belief is that we will have proceeded far enough along with the conference on the railroad bill so that by the first of the week, or shortly thereafter, we can take up the retirement bill.

MR. MCCORMICK. "Hope deferred maketh the heart sick."

MR. MCKELLAR. I just want to make this suggestion to the Senator from South Dakota: I happened to be chairman of this committee last year, and I know something about the difficulties both of getting it up and of keeping it before the Senate after you get it up. If the Senator will look back about a year or a litle more in the Congressional Record, he will find almost

this exact controversy arising, the only difference being that then I was trying to get up the bill, and today the Senator from South Dakota is trying to get up the bill. I want to say to him that in my judgment, unless he gets this bill up today or this week, it will stand no chance of passing, because the treaty will be taken up, the appropriation bills will come along later, and he will not have a chance to have the Senate vote on the bill. The Senator from Ohio has consistently opposed every effort to get up this legislation from the beginning.

MR. POMERENE. Mr. PresidentMR. MCKELLAR. I mean, as far back as I recall, as far as I know. I know that the Senator takes the view that he is in favor of some sort of civil service retirement law, but he certainly is not in favor of the bill that is now before the Senate. He has been one of the most active of all its opponents. I recall many times when I was attempting to get it up having yielded to his blandishments, which are always very persuasive with me, as I am very fond of him; but we did not get anywhere, and we are not going to get anywhere now unless we have a vote. I just want to suggest to the Senator from South Dakota that if we are going to get anywhere on this retirement legislation we had better have a vote on it today, for I doubt if we will have any other chance.

MR. POMERENE. My distinguished friend from Tennessee (Mr. McKellar) ordinarily is accurate in his statements, but he is far afield this afternoon. This measure did come up. It is true that there were certain days on which I objected to its coming up. It is also true that I helped to get it up. It is also true that after a full discussion of it the Senate adopted my substitute for it, and then the Senator from Tennessee did not want to proceed any further. It is also true that on

one or very

two afternoons, when there was a small attendance here, and when the Senator thought he had the whip hand of the situation, he wanted to bring it up.

I shall be content with any action that the Senate takes after it has had an opportunity to inform itself as to the merits of the situation. I understand a lot of the distorted statements of fact on this subject that have been spread broadcast over this country by a lobby in the last few years-representations, for instance, to the effect that we were going to take 8 per cent of every man's salary, and a lot of things of that kind. I understand that perfectly, and later on I may have some observations to make upon this subject. I am quite content to have anybody advance his cause; and say anything that can be said truthfully in advancement of that cause; but I want to take issue with some of these lobbyists that have been hanging around here, who are responsible for the fact that there is no retirement bill on the statute books now. I only hope that the civil service employees of the Government will be made to understand that some of these days. They will if I have the ability to make them understand it.

MR. STERLING. Mr. President, I should like to say to the Senator from Ohio that the civil service employees are quite united now and know just where they stand in regard to civil service retirement.

MR. MCKELLAR. Mr. President. will the Senator yield to enable me to say just a word?

MR. STERLING.

Certainly.

MR. MCKELLAR. Of course I am not going to argue the matter with the Senator from Ohio, further than to say that in the fight last year, when we had this bill up as the unfinished business for nearly two months, if he was the friend of the civil service employee, then I say God help the civil service employee, because to my notion no man ever fought a measure with more vigor and with more success than the Senator from Ohio fought the civil service retirement measure that was then before the Senate, which is substantially the same as the present measure.

I hope the Senate will vote this afternoon to make it the unfinished business. I do not think we ought to delay. I think we ought to proceed with the work. Of course we all have committee work which we are obliged to attend to, and it is important, as Senators may look at it. Each one, perhaps, thinks that his own business is the most important; but there is time to argue the case here, and the Senator from Ohio will have the time, and if the Senate takes it up and makes it the unfinished business and proceeds to the consideration of it we will find the Senator from Ohio on the floor arguing against it.

MR. STERLING. Mr. President, I hope the motion will prevail for taking up this bill as the unfinished business.

February 5, 1920

MR. STERLING. I move that the Senate proceed to the consideration of the bill (S. 1699) for the retirement of employees in the classified civil service, and for other purposes.

THE VICE PRESIDENT. The yeas and nays have been ordered on this motion, and the roll will be called.

The reading clerk proceeded to call the roll.

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The motion to: was agreed and the Senate, as in Committee of the Whole, proceeded to consider the bill (S. 1699) for the retirement of employees in the classified civil service, and for other purposes, which had been reported from the Committee on Civil Service and Retrenchment with amendments.

MR. STERLING. I ask that the bill may be read.

THE PRESIDING OFFICER (Mr. Fernald in the chair). The Clerk will read the bill.

The bill was read. MR. STERLING. Mr. President, in the consideration of this bill I admit at the beginning a full sense of responsibility. It

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is an important measure, and if it is passed it means the establishment by our Government for the first time of a civil service the retirement system, under which ployee in the classified civil service, if he has served the requisite time provided by the bill-namely, a minimum of 15 yearsand has reached the age of retirement provided for in the bill-namely, in most cases 65 years and in other special cases 62 years and 60 years, respectively-will have upon retirement a maximum annuity, dependent upon length of service and amount of salary, of $720, and a minimum annuity, dependent likewise, of course, upon a smaller salary and a less period of service, of $180.

Mr. President, I think we all have observed the need of a civil service retirement system. We can not have visited the several great departments of this Government from time to time in the performance of our duties as Senators without seeing here and there in every department at the various desks at which clerks are employed the inefficient who were unable to perform full service, their inefficiency ranging all the way from no efficiency at all to. perhaps, 75 or 80 per cent of efficiency in the service. The first question, Mr. President, is, who now are interested in the passage of a civil service retirement bill and in the establishment of such a system for our Government?

There are three parties who are interested: First, the employees themselves. We may divide those into two classes, first. the aged, who after long years of service on very moderate salaries, on which they have been unable to accumulate anything. feel that they are entitled because of that long service to some recognition from the Government. and to have some provision made for their declining years, the few remaining years after they have reached the age of retirement. But the aged are not the only ones who are interested in a provision of this kind. The younger men and women are interested, too. And why? Because the retention in the service of the aged and inefficient denies them their right to advancement and promotion in the service; and so we may say in a broad way that all classes of employees are interested in and. I think. have a right to demand the enactment of an adequate civil service retirement law.

MR STERLING. The Government, by reason of a lack of efficiency on the part of aged employees, of course. is expending. I will say now, millions of dollars annually that it should not expend, and would not be required to expend under a proper civil service retirement system. Mr. President, there is the great public besides. It all ultimately comes back to the public, and the interest the public has in such a system, of course interested primarily in efficient government. in the doing of the work of several departments of Government well. It is interested, of course, in the second place in the doing of the work economically, interested in the sav ing of the millions that may be saved annually under a retirement system.

So we have those three factors: The employees themselves, by whom I know we

wish to do justice and can not without some retirement system; the Government, itself, whose business should be efficiently and economically managed; and the public itself, the taxpayers, who are affected, of course, by inefficiency and lack of economy in the dispatch and management of the Government business.

This much, Mr. President, is preliminary. I shall let authority better than myself speak as to the needs, and I will quote briefly from those who officially come in contact daily with the situation. The Committee on Civil Service and Retrenchment of the Senate had quite extensive hearings on this bill, and I want to quote briefly from some of the statements made in those hearings.

Senator Sterling quoted statements submitted to the Committee from Secretary of Commerce Redfield, Secretary of Labor Wilson, Secretary of the Treasury Glass and other Government officials in favor of the enactment of a retirement law. Continuing, Mr. Sterling said:

So much for the general needs of a civil service retirement system.

Can the Government of the United States, with its its population, resources, its wealth, afford to institute a civil service retirement system? We can afford it better than any other nation in the world. As I said at the outset, there is no great civilized nation in the world but has its civil service retirement system. I beg the indulgence of the Senate for just a moment while I call attention to some of the systems found in other countries.

Germany, for example-and I hope that Senators will note the cost of the civil service retirement system to the Government of Germany-has had a civil service retirement law since 1873. It was amended in 1881, in 1886, and again in 1907. Permanent disability after 10 years of service entitles to a pension for the remainder of life; twenty-sixtieths for retirement for iccapacity during the first 10 years of service; that is, twenty-sixtieths of the average annual salary. Let us apply that and see how much Germany pays in comparison with what the United States Government would have to pay under the pending bill. Taking the basic salary of $1,200, the pension would be $400 for less than 10 years of service. From the tenth to the thirteenth year, inclusive, however, the pension increases. It is increased each year by one-sixtieth of the annual income. Thus, if the salary were $1,200, one-sixtieth would be $20 and when the employee had served the thirtieth year his pension would be 20 times $20, plus $400, or $800. Germany then pays $800, where we, at most, would pay $720, and the employee under the German system does not contribute one cent. It is a straight pension by the Government. Again, Mr. President, in addition to that, after the thirtieth year the pension is increased one one-hundred-and twentieth for each year of service, which on a basis of $1,200 a year would amount to $10 per acnum. The maximum amount which a pensioner may draw is limited to forty-fivesixtieths of the employee's salary, and thus on a salary of $1,200 the maximum pension would be $900 in Germany as against $720 which the Government of the United States would pay under the system provided under the pending bill. Which the Government of the United States would pay? No; the Government of the United States would not by any means pay all of that. Depending upon the salary of the employee, his years of service, and upon his contribution, the Government would pay so much less than $720.

Great Britain has had a pension system since the beginning of the nineteenth century. She has for a long time had a pension law which made provision for the aged employees of the Government.

The pension now is so graded as to encourage retirement at the age of 65 years.

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There is this further difference to be noted between the provisions of the pendbill and provisions of the statutes most other countries that I have amined. The employee will not be entitled to a pension under the provisions of the pending bill unless he has served a minimum of 15 years. Under the laws of other countries he will be entitled to a pension upon the completion of a service of 10

as far as I can: Great Britain, Germany, Canada, Italy, and, I think, France, although I will not be sure as to France. I have not the data before me now, but I think France. I think the general rule in all countries where provision is made for retirement allowances or pensions is that a minimum service of 10 years is required, rather than the longer service of 15 years, as provided in the pending bill.

The great consideration is that those countries that can less afford to pay the pensions than can the Government of the United States are paying more and higher maximum pensions than are provided in the pending bill, and that, as a rule, without Contribution upon the part of the employees.

Now, a little further as to the system itself. This is sometimes called the partially contributory system. I think that is a misnomer really. It ought to be called the contributory system. That better defines the system whereunder the employee contributes a part and the Government contributes a part. Call it a contributory system. Where the employee contributes

all that goes to make up his pension or pays all that goes to make up his pension, it can hardly be called a contributory plan. Contribution would seem on its face to imply different parties who were making contributions to the one fund.

Canada has had quite an involved pension or retirement system. There have been many changes in the laws of Canada within comparatively few years, but recently Canada has had under consideration the matter of a revision of her retirement laws. I am not sure but that the revision has been made by late enactment.

MR. KELLOGG. I do not wish to break into the Senator's speech, if he will answer the question which I desire to have answered in some other place; but as I am compelled to attend a meeting at 3:30 o'clock I should like to know whether estimates have been made as to what the establishment of this proposed system of retirement will cost the Government each year. The Senator, however, need not stop now to answer that question if he desires to defer its answer.

MR. STERLING. I think I might as well answer it now, so far as I am able. In the report made by the Committee on Civil Service and Retrenchment there will be found incorporated

MR. KELLOGG. Does the Senator refer to the report on the pending bill?

MR. STERLING. Yes. There is found incorporated in the report an estimate made by Mr. John S. Beach, of the Pension Bureau. Let me say with reference to Mr. Beach, that he is now and has been for some years the statistical accountant of the Pension Bureau. He was detailed by the Secretary of the Interior recently to aid in the work of the Reclassification Commission. Beginning on page 4, the Senator from Minnesota will find a statement of the cost. Mr. Beach estimates the contribution from 300,000 employees to be $8,535,000. Those will be the contributions, I will say to the Senator, at the rate of 21⁄2 per cent of the anual salary received by each employee. The number of 300,000 employees is a little below the number at present in the civil service. I think the number now in the civil service is perhaps 350,000 or, perhaps, more than that.

MR. POMERENE. In that number, I take it, the Senator is including what might be regarded as the extra employees due to the war?

MR. STERLING. Some of them are, if the Senator from Ohio will permit me to explain. The Civil Service Commission's report for 1917 shows, as I remember, the number of employees in the classified service of the civil service as being 326,000; but that, I take it, was more than normal: it was after we had entered the war and a great number of additional employees had entered the service on that account. I think to take 300,000 civil service employees would be to take the number of employees for normal times, and that is the number

MR. HARRISON. I think this is such an interesting matter that we ought to have more than four Republicans and five Democrats in the Chamber, and I suggest the absence of a quorum.

THE PRESIDING OFFICER. Will the Senator from South Dakota yield to the Senator from Mississippi?

MR. HARRISON. The Senator from South Dakota did yield.

MR. STERLING. I yielded, and, inadvertently, did not stop to inquire whether

or not the Senator from Mississippi wished to ask a question. I will not interpose an objection.

MR. HARRISON. Mr. President, the Senator from South Dakota yielded, and I suggested the absence of a quorum.

THE PRESIDING OFFICER. The Secretary will call the roll.

The roll was called.

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THE PRESIDING OFFICER. Fifty Senators have answered to their names. A quorum is present.

MR. STERLING. Mr. President, I was proceeding to answer, as best I could, the question of the Senator from Minnesota (Mr. Kellogg) when the absence of a quorum was suggested. I was calling attention to the statement made by Mr. John S. Beach, and found in the report of the Senate committee on this bill.

This report is based on an average annual salary for employees of $1,138. This was, in 1916, about the average annual salary. I have seen other statements making it about $1,132, but it probably ranged from $1,132 to $1,140 as the average salary of all the 300,000 employees of the Government. The report is based further on the theory that the average annuity will amount to $610, the maximum under the bill being $720 and the minimum, the very lowest, $180.

It is based on the further supposition that there will be retirements in the classified civil service of 6,400 persons. So take the contributions of 300,000 employees getting an average salary of $1,138, and you have as a result of those contributions $8,535,000, and annuities for 6,400 annuitants at $610, which will amount to $3,904,000. Then Mr. Beach takes into consideration another element, namely, that under the provisions of this bill employees will be separated from the service before they reach the retirement age, and that on their retirement there will be refunded to them the amount they had paid up to the date of retirement, together with compound interest at 4 per cent; so he estimates for the first year a refund of $274,500, making all told in annuities paid and in refunds paid $4,178,500, leaving a surplus or balance over and above all that has been expended by the Government of $4,356,500. So, Mr. President, for the first year of the operation of this act, according to the estimate of Mr. Beach, the Government will not be required to expend one cent. No appropriation will be required save the appropriation to put the act into operation and which is asked for in the bill.

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MR. POMERENE. The Senator has referred to the various systems of retirement which prevail in several countries, and he made special reference to the Canadian system. My information is that the Canadian Government deducts 5 per cent from the salaries. Am I right about that?

MR. STERLING. I do not think the Senator is right about that.

MR. POMERENE. I have been so informed this afternoon by a student of the subject, who is very familiar with it.

MR. STERLING. However, I will look that matter up a little further.

MR. POMERENE. If the Senator has that information I shall be glad to get it. Of course, he and I are both interested in being accurate about it.

MR. STERLING. I think I have it at

my office. I am quite satisfied from the statements I have seen as to the Canadian law and its application that it does not apply to all civil service employees of the Canadian Government, even if there is any class of employees to which it does apply. MR. POMERENE. It is true, is it not, that in France the deduction is 5 per cent? MR. STERLING. There is some deduction in France, as I have discovered. I will refer to that a little later.

MR. POMERENE. I think the statement of one of the witnessess whom the Senator had before his committee was to the effect that it was a deduction of 5 per cent.

MR. STERLING. Mr. President, we are asked to think of this in relation to the cost to the Government, the immediate outlay to the Government in dollars and cents. We do not think and I might say that the average citizen, perhaps, would not think of the saving to the Government in increased efficiency on the part of the employees and increased economy in the Government service.

I hold in my hand a letter from Mr. McCoy, and I wish to quote just briefly from the letter. He has had under examination the pending bill, and has stated that according to his estimate while the plan will