we do not accept that to the extent of feeling that that would justify just any conceivable deficit.

I know as a Member of Congress I feel a responsibility if we are going to increase the expense somewhere, to find the money to pay for it, and sooner or later we have to do it. That is why I am inclined to feel that the Postmaster General, in expressing opposition to that bill-and I do not know that he has done so for sure. Are you positive that he opposed that?

Mr. HALLBECK. Yes; I know very definitely. I have seen a copy of a letter on similar legislation on the other side of the Capitol, and I am quite sure he has sent a similar letter to this committee.

Senator LONG. It gives me the impression he feels a responsibility to hold the Post Office deficit within some limits, and I believe that that is what he has in mind in increasing these mail rates.

Mr. HALLBECK. I think that that is true. Incidentally, I might say this: The Postmaster General is a former member of our organization. As a matter of fact he was a charter member of one of our charter locals, and no one has any greater admiration for Jesse Donaldson than the members of my organization.

We do feel, however, that we have a right to disagree on a theory, and I will bring it out a little bit later, that all improvements in the conditions and wages of postal employees must necessarily be dependent upon whether or not the postal budget is balanced.

I do not think that it is our sole responsibility, and I for one am not willing to agree that we have to wait until the postal budget is balanced before we seek any further improvements.

Senator LONG. Well, I agree with you that if you expect to wait until the postal budget is balanced to get your increase, you will be waiting a long time in all probability.

Mr. HALLBECK. We will be in a very stagnant state, sir.

Senator LONG. However, I am inclined to feel that a partial answer to this problem is an increase in the rates to bring the service in line with what it costs. I realize just from a study of it that the first-class mail is paying its way, but that is, as I understand it, only 10 percent of the weight that a postmaster carries around.

About 90 percent of it is this mail that is not carrying its weight, and it looks to me as though that is one of the few things in this country that has not gone up, the cost of many classes of mail.

Mr. HALLBECK. Well, you say it has not gone up. I can remember when it was 2 cents an ounce, so it has increased at least 50 percent, and that is not too long ago. Actually it has gone up, but certainly postal rates generally have not increased like everything else has increased. There can be no doubt about that.

Senator LONG. That is the impression I got.

Mr. HALLBECK. Whether or not they should increase, sir, is a matter that the Congress itself is ultimately going to have to determine. As a matter of fact there has never yet been a determination by the Congress whether the Post Office Department was necessarily a selfsupporting institution, or whether it was a service arm of the Federal Government.

Now the fact that it takes in revenues cannot be the sole criterion because a lot of other Government departments take in revenues, and those revenues by no means even approximate their expenditures, so they have a deficit, too, if we are going to talk in terms of deficits.

Senator LONG. I am inclined to think that when we speak of the Post Office as being subsidized, that actually we are not subsidizing the Post Office. We are subsidizing the unlimited number of people who are getting something from the Post Office for less than what it costs to provide the service.

Mr. HALLBECK. That is true, sir. Of course, there is another angle. You could, I imagine, prepare a statement of cost and expenditures based on the classes of office and you would probably find the first and possibly the second-class offices pay their own way entirely, whereas third and fourth-class offices universally lost money.

Well, now, certainly neither I nor as far as I know anyone else is going to advocate increasing services in those localities that are served by third- and fourth-class post offices. The service is rendered to the American people whether they live in the largest city or in the smallest town, and the fact that the revenues in that particular office do not equal the expenditures for postal service is not to my mind a valid reason for discontinuing those services.

Senator LONG. What do you think of the proposal that is being debated on the floor of the Senate at this moment, the proposal to reduce the Post Office budget by a flat 5 percent?

Mr. HALLBECK. This might surprise you. From an experience of almost 29 years in the postal service now, I do not believe that it could possible be worked out. What you said this morning is substantially true.

Approximately 95 percent of the postal expenditure is paid either for transportation or for salaries. Now as far as transportation goes, you know as well as I do that the Post Office Department cannot possibly reduce that. That is a matter for the Interstate Commerce Commission and other quasi-judicial bodies to determine. The Postmaster General has no control over that.

They increase those rates and he cannot help himself except to pay them.

Well, now, as far as salaries are concerned, they are set by the Congress. The theory might be offered that perhaps you could do with fewer employees. Actually the business of the Post Office Department is increasing at such a rate that they are going to have to have more employees.

Just recently in the case of the Railway Express Agency, they quit handling an awful lot of express parcels. All of those came into the postal service, and they cannot be moved without manpower.

Probably more than any other single industry, the Post Office Department is dependent upon the hands and the eyes and the minds of its employees. It is impossible to mechanize it.

If you go through the parcel post section in any large city, I am sure you will see what they mean when they say that a post-office clerk works at manual labor. The filling of sacks, the dragging of sacks, the sorting of mail, is actually hard, laborious work. It is not something that you can say, "Well, we will take 10 men out of here and it will get done," because each package requires handling and it has got to have manpower to handle it.

Senator LONG. The theory being argued on the floor a few minutes ago is if you have 20 attorneys working in an office, you can always do without one of them. Now do you think where you have got 20 postal workers somewhere, you can always get rid of one of them and still get the work done?

Mr. HALLBECK. You cannot, sir, and I say that from a background of real experience, sir. I put in 11 years working nights, and I have done quite a lot of other things in my life.

I was telling the reporter here during World War I, I helped to build the new War and Navy Building, as it was known then, at 18th and C Streets.

I have worked in private and public industry, and I will tell you I have never worked harder in my life than I have in postal service. There is not any slacking there. I think that can be easily verified.

Just go right over here to the city post office in Washington any day you choose. Walk in there unannounced, and I will bet you that you will see more men working hard than you had ever been led to believe worked hard for the Federal Government.

Senator LONG. I cannot recall ever seeing a great number of people loafing around the post office. There may have been on the outside of the window, but not on the inside.

Mr. HALLBECK. Well, those were the patrons. They can afford to, but the fellow in back of the window does not get the opportunity. To repeat myself now, I quoted the statement of the Postmaster General to the effect that the increase granted last year was less than the increased living cost has been.

That was true in August of last year and is certainly no less true. at this time. The Bureau of Labor Statistics Consumers Price Index issued on April 22 of this year shows an index figure of 169.6 compared with 166.9 for a year ago. This would indicate that despite a temporary decline in the recent fall and winter months, the cost of living has actually risen 2.6 percent in the past year. The Postmaster General has expressed the thought that no proposals for general salary increases for postal employees should be considered favorably unless accompanied by provisions for increasing the postal revenues sufficiently to offset the estimated cost of the increased expenditures. With that thought, we are not in agreement, as I told you just a moment ago.

While everyone will agree that a balanced budget for all Government agencies is an ideal condition, we are not of the opinion that the postal budget should be balanced solely at the expense of postal employees. In a broad sense, the Congress has never determined that the Post Office Department must of necessity be self-supporting. On the contrary, the Congress has, by statutory enactment, invested in the Post Office Department the obligation to perform certain services in the promotion of the public interest without regard to the cost of such service or its effect on the postal budget. If we were to accept the thought that legislation should not be enacted simply because the receipts and expenditures of the Post Office Department are not in balance, we would have to resign ourselves to a permanent substandard condition insofar as wages and other conditions of employment are concerned. We cannot accept such a conclusion.

Since this subcommittee is considering among other bills a number of measures dealing with reclassification, I think it proper to bring to attention a situation presently prevailing in the postal service, which calls for a revision of the act of July 6, 1945, the Postal Classification Act. A bill to amend that act, S. 1772, was introduced only last week by a distinguished group of Senators, including Senators Langer, Humphrey, McKellar, Ecton, Hendrickson, Frear, and Bald

win. In brief, that bill would equalize sick and annual leave for postal and Federal employees; eliminate the present four lowest salary grades which have placed a terrific burden on the newer employees, mostly veterans; provide credit for past service in promotion to the so-called meritorious service grades, which would benefit older employees who would otherwise retire before becoming eligible for such grades; provide for compensatory time, which is time granted for services performed on Saturdays, Sundays, and holidays, on a basis of 90 minutes for each hour of service in common with practices in private industry, and provide salary increases for both substitute and regular employees. We endorse this legislation with the understanding that the language in section 3 (b) which reads:

Each person whose original appointment to a regular position in the postal field service is made after June 30, 1949, shall be placed in grade 5—

is amended to apply to all classified employees, regular or substitute. I suggest that this may be best accomplished by striking out the word "regular" in this section.

While endorsing both S. 558 and S. 1772, it is recognized that there may be technical objections to the committee acting on two separate bills with a similar purpose. With that thought in mind, the suggestion is offered that section 4 of S. 1772 be amended to include the provisions of S. 558. This will very effectively combine the purposes of both bills in a single instrument.

In conclusion, Mr. Chairman and members of the committee, I want to express my appreciation for the consideration that you are giving to this very important problem and to express the hope of all postal employees that this subcommittee and the Senate Committee on Post Office and Civil Service will take prompt favorable action on this question.

Thank you.

Senator LONG. Thank you very much.

Mr. HALLBECK. Mr. Chairman, in order to conserve the time of the committee, a number of people who would like to appear as witnesses have given me statements that they would like to have placed in the record. With your permission I would like to leave them with you.

Senator LONG. I will be very glad to have that done.

Mr. HALLBECK. They are roughly in line with my general testimony. Senator LONG. The statement of the New York Federation of Post Office Clerks; statement of John J. Leahy, president of the National Federation of Post Office Clerks, and the statement of Robert M. Leach, president of the Long Island Federation of Post Office Clerks, will be printed immediately after your statement.

Mr. HALLBECK. Thank you, sir.

(The statements above referred to are as follows:)

STATEMENT OF PATRICK J. FITZGERALD, PRESIDENT, NEW YORK FEDERATION OF POST OFFICE CLERKS, LOCAL No. 10, NATIONAL FEDERATION OF POST OFFICE CLERKS

Mr. Chairman and members of the subcommittee, I address my appeal to you in behalf of close to 9,000 members of the New York Federation of Post Office Clerks. In their behalf I request that this subcommittee give thorough consideration to the questions of an adequate salary increase, extension of vacation and sick-leave privileges, and amending Public Law 134 to the extent that past service may be credited for longevity and, other inequities of that law may be corrected.

In January 1948 during the Eightieth Congress extensive hearings were held before a similar Senate subcommittee on salary legislation. Voluminous testimony was presented to that committee attesting to the dire needs of postal employees. Let me refer particularly to the testimony of Mr. E. C. Hallbeck, legislative representative of the National Federation of Post Office Clerks, who then proved that a $1,000 increase was necessary to put postal employees on a par with 1939. Mr. Hallbeck, using the statistics of the Bureau of Labor Statistics, the Guaranty Trust Survey, and other reliable surveys brought out the following salient facts.

In 1939 a postal employee who was then earning the inadequate wages of $2,100, earned $41.63 weekly in real wages. In January 1948, while the average wages were $2,816, expressed in 1939 dollars this amounted to $31.62. Thus despite two salary increases up to that time, a postal employee earned $10.01 per week less than he did in 1939. Further, the testimony of Mr. Hallbeck revealed that a postal clerk whose average salary in 1939 was $2,165.21 required $3,906.90 in January 1948. Thus postal clerks required an increase of $1,090.90 at that time to be put on a par with 1939.

How did postal employees fare in their salary increases by comparison with factory workers? This testimony revealed as follows. Dollar wages of factory workers had risen from $24.54 in 1939 to $50.42 in 1947, whereas those of postal employees had risen from $41.63 to $54.15. Expressed in terms of real wages those of factory workers had risen from $24.54 to $29.64, while those of postal employees had declined from $41.63 to $31.62. Despite this preponderant proof for at least $1,000 increase, Congress granted to postal employees a $450 increase in July 1948. This increase was termed inadequate by legislators and many public officials. Thus, after receiving a third salary increase, postal employees still found themselves over $700 behind their needs to be put on a par with what they enjoyed in 1939. In January 1948 when this mass of evidence was presented to the Senate subcommittee the cost-of-living index stood at 167.5 and the latest figures of the Bureau of Labor Statistics as of April 15, 1949, is 169.3. This is further proof that the $650 increase for postal employees provided in S. 558 is an absolute minimum and should receive the close attention of this committee.

I'd also like to acquaint this committee with the facts that New York City is one of the costliest cities in the United States to live in, and newly appointed regulars who are in the main veterans of World War II are appointed at $2,550, far below the maximum salary of a postal clerk. These men find it even more difficult to support their families especially when the housing situation is so bad and they are forced to pay exorbitant amounts for rent when they do find apart

ments.

Perhaps also of interest to this committee will be the results of a recent survey made by our union amongst its membership. This survey showed that 50 percent of our membership had to seek outside additional employment in order to supplement their postal earnings; 22 percent of the membesrhip had their wives working for the same reason; 47 percent were forced to borrow money for an average loan of $396, 69 percent either cashed their savings bonds or withdrew from their savings accounts an average of $349.

These facts show a desperate need for an adequate salary for postal employees which the Congress must recognize. If the morale of postal employees is to be raised, if the welfare of the wives and children of these employees is to be protected, Congress must enact an increase in salary of $650 as contained in S. 558. I'm sure that this committee will give this matter every consideration and I look forward to a favorable report in the near future. Thank you very much for the opportunity of presenting this statement on behalf of our membership.

STATEMENT OF JOHN J. LEAHY, PRESIDENT, NATIONAL FEDERATION OF POST OFFICE CLERKS

Mr. Chairman and members of the committee, within the next few weeks there will be a good deal of activity amongst congressional committees dealing with post-office legislation. Of greatest concern to the members of this organization is the Johnston bill, S. 558, calling for a permanent salary increase of $650 for post-office workers.

It is not my intention to bombard you with a lot of statistics on the cost of living and the plight of the postal worker today. Suffice it to say that reliable authorities have determined the afore-mentioned salary increment would bring us to the cost-of-living level enjoyed in 1939.