and that the more they accept the more they have got to entertain. They could go on ad infinitum if encouraged. I can not see, as to one of the secretaries of the lower grades, why it is necessary for him to have a large allowance to entertain, and it looks to me like they could look forward to the time when they got into the higher grades, when he could do something in that line. Mr. WRIGHT. I should say in reply that, without in any way accentuating any differentiation between the obligations incumbent upon a Member of Congress or any other Government official resident in this country and a Government official accredited to another country, in the first instance-please understand the spirit in which I say it-it is not necessarily obligatory, but in the service it is incumbent upon the individual to discharge certain of the obligations which come upon him through no desire of his own, but by virtue of his official position. Mr. CONNALLY. You are speaking of secretaries now? Mr. WRIGHT. Only of secretaries, because I understood that is your point. I could describe it in detail, if I were not so desirous of saving the time of the committee. Many of these things are in the nature of obligations imposed upon him by courtesies extended by the Government to which he is accredited, by the people of the country and by other colleagues, and which, so long as diplomatic life continues as it is, are such as to occasion him not only embarrassment, but really-and I say this in all sincerity-seriously to jeopardize his efficiency along the line of personal contacts. I think, gentlemen, that you will agree that the scale of pay in the junior grades, as provided in this bill, is not exhorbitant. It is not in the nature of an allowance for that purpose, as I endeavored to show a moment ago, and I think we can assert that in view of the nature of the work which the best men in the service now perform, and which we propose shall be performed by nothing but the best men that this country can produce, it is such as to demand and justify the payment of the emoluments provided for in this bill, and that those men, with their experience of international affairs and the economopolitical aspect of international relations, could demand far more than that at home. Mr. CONNALLY. They would not get any retirement. Mr. WRIGHT. I do not know what the practice is in certain organizations in that regard, but it might be possible. I do know of certain cases. For instance, I know a man who left our diplomatic service to receive an emolument of practically seven times what he was receiving at the time that he left the service and he was chosen by this concern on account of his knowledge of international affairs and his knowledge of languages. It is quite possible that, even without a retirement provision, he may have been able to save at least a portion of that, which the members of the service are at present unable to do. Mr. CONNALLY. If he had not gotten that information and training in the service he would not have gotten that job? Mr. WRIGHT. The information and training received in the service are the greatest assets. Mr. CONNALLY. You do not contend that we can compete with FOREIGN SERVICE OF THE UNITED STATES. Mr. CONNALLY. As Secretary Hughes pointed out? Mr. WRIGHT. Exactly. 75 Mr. CONNALLY. If the committee, in its unwisdom, should limit the percentages of these different grades of these persons, of class 1 and class 2, what would you suggest as the proper percentages? I mean, if we should say that there shall only be in class 1 a certain percentage of the total percentage in all classes, what would you suggest? Mr. WRIGHT. We have already prepared certain tentative data along that line. Mr. ROGERS of Massachusetts. I suggest, if agreeable to you, that you insert in the record without reading the State Department estimate. Mr. WRIGHT. It is very short. Mr. ROGERS of Massachusetts. Let us have it read then. Mr. WRIGHT. This is only tentative. It could not have been otherwise because the wording of this bill awaits the pleasure of the committee and of Congress. Table of percentage limitations based on a total of 650 officers. Of the combined services, 6 per cent of the total of 650 are in class 1, or 39 officers; 7 per cent in class 2, or 45 officers; 8 per cent in class 3, or 52 officers; 9 per cent in class 4, or 58 officers; 10 per cent in class 5, or 65 officers, and 14 per cent, or 91 officers, in class 6. That is a total of 54 per cent of the service in the first six classes The balance are in the lower grades or unclassified. Mr. ROGERS of Massachusetts. Very well, Mr. Wright; we thank you for your testimony. We will hear Mr. Lay, who is here from New York. STATEMENT OF MR. JULIUS LAY, OF NEW YORK CITY. Mr. LAY. I am now of New York and Washington, D. C. Mr. ROGERS of Massachusetts. You were in the Consular Service for many years until you resigned some three or four years ago? Mr. LAY. Yes. Mr. ROGERS of Massachusetts. You are not now in any way connected with the Department of State? Mr. LAY. In no way whatever. Mr. ROGERS of Massachusetts. Your presence here in the committee room yesterday and to-day was voluntary on your part and not sug interest in seeing something a little better done for the foreign service of the United States? Mr. LAY. Exactly. Mr. ROGERS of Massachusetts. Will you give the committee, if you are willing, a brief résumé of your official career as a consular officer very similar to that which Mr. Wright gave us yesterday in beginning his testimony? Mr. LAY. I happened to be in Washington from New York on a matter of business and came into the committee room yesterday, as I take a tremendous interest in anything that is attempted to improve the service. I am asked to-day to give you my experience in the service and I shall be glad to do so, thinking, perhaps, you might wish to get the point of view of one who has resigned after being in the service for many years. I was about 30 years continuously in the service, serving in Canada, in Spain after our Spanish war, Canton, China, Cape Town, South Africa, Rio de Janeiro, Brazil, and at Berlin until we were all fired out of Germany when the United States entered the war. I then was detailed in the Department of State as foreign trade adviser. That is the economic division of the State Department. I remained there for about three years, and having exhausted by private means subsidizing Uncle Sam for so many years, I found it necessary to leave the service principally because I had not means for my old age after I should retire. If the Rogers bill as at present drafted had become law and provision had been made for retirement allowance I surely would not have resigned from the service. I might say I was offered a position in New York in an international bank with which I am now connected, receiving several times the salary that I did receive in the service. Mr. Connally asked Mr. Wright why foreign-service officers have to spend money on social entertainments. Mr. CONNALLY. I spoke of secretaries. Mr. LAY. I am not speaking merely about the Diplomatic Service but of the Consular Service. A consular officer must live respectably and decently. Mr. CONNALLY. I assume that everybody should do that. Mr. LAY. By that I mean he must entertain to some small extent the local officials and the local business men if he intends to accomplish his utmost in what he is sent abroad to accomplish for America's trade and commerce. He should not sit in an office and sign invoices and write reports from newspapers but he must have a friendly contact and association with the prominent business men and local officials of the place in order to get the information and assist prominent American business men to get contracts and accomplish the work he is sent to the foreign post to perform. He can not do that unless he has an adequate compensation to live decently and properly and upon some occasions in a small way entertain and create friendly relations with the people with whom he has his business relations. I might cite as an illustration a case in point that occurred to me in Brazil. The Brazilian Government called for tenders for a contract for cars for a Government railroad. The time fixed for submitting bids was very short, so short that the American car manufacturers would have been unable to send a man to Brazil to bid on this contract. We had no agents of American car manufacturers in Brazil at the time. Furthermore, the specifications were not so drawn that the American car manufacturer could manufacture those cars. The advantage was all in favor of the Belgian, German, and British car manufacturers. As it happened, I had entertained the general manager of the Government railways. I was in friendly relations with that official and several others connected with the railroad administration and was able to go to them and induce them to extend the time fixed for the submission of those bids and when the agents did arrive to have the specifications changed. I have always thought that if I had not been able to show that general manager some hospitality and had not had the means to do so that contract might have gone to our European competitors. That is the best concrete case that I can give you of the necessity for consular officers knowing the local officials and being on friendly terms with them. Mr. ROGERS of Massachusetts. You have no children? Mr. LAY. No. Mr. ROGERS of Massachusetts. You told me in the past that you lived very simply in all your various stations. Mr. LAY. Yes; I tried to live in keeping with my position. Mr. ROGERS of Massachusetts. And yet did I understand you to say at the outset that most of the time you were unable to make your salary match your necessary living expenses? Mr. LAY. All the time. I used up my private means and felt that I had to. Mr. CONNALLY. Why did you do that? Mr. LAY. Because I felt that I could not property represent my Government abroad and could not fill the bill unless I did what I have explained. Mr. CONNALLY. You did it because you wanted to. Mr. LAY. I had to properly represent the Government or get out. I did not want to be a clerk and pound a typewriter. Mr. CONNALLY. You did not have to stay in the service. You finally did get out of the service. Mr. LAY. Yes; because I might have remained if I could have looked forward to a retirement allowance for my old age, but I thought that I must put something away for retiring years. That is the reason I resigned. Mr. COLLINS. This is a bill more in the interest of the Diplomatic Service than the Consular Service, is it not, aside from the retirement allowance? Mr. LAY. I think that this bill will benefit the Consular Service immensely and will retain in this service and attract a class of young men who are not now applying for examination. Mr. Wright has told you that the department has discouraged young men without means from entering the Diplomatic Service. Most eligible young men for both services have asked my advice-to get the benefit of my experience as to the advisability of entering the Diplomatic or Consular Service. I have told them not to think of it unless they have private means. If this bill is passed, if these men came back to methe men of the same type-I would tell them by all means to go into it, as it is a splendid career for any man. Mr. COLLINS. That is because of the retirement law? Mr. LAY. Yes: it would be a benefit to the Consular Service and it will be a benefit to the foreign service generally as an inducement for young men to enter the Diplomatic Service without means. I should think, with a retirement provision, a lot of our best young men would join the Diplomatic Service. Then, again, this interchangeable feature, in my opinion, is excellent. There has been a lot of criticism among business men of what they choose to term the pink-tea manners and un-American attitude of some of our diplomatic officers, but I agree with Mr. Wright. I think our service, both the Diplomatic and Consular Service, is as good, if not better, than any foreign service. Mr. O'CONNELL. Under present conditions? Mr. LAY. Under present conditions. But it is a mystery to business men to whom I have talked, who know the service, how the service gets the men it does, and how such good men go into it. That interchangeable feature will improve the consuls and reduce the number of diplomatic pink-tea artists. There are fortunately only a few of them. After a short period of service for a consular officer in the Diplomatic Service, you will rub off the rough edges of the young men from the jungles who were mentioned yesterday. Mr. MOORES. I wish you would explain one thing that ought to be explained. A Member of Congress who is a business man in a large way told me yesterday that he visited an American consulate in Buenos Aires. A representative of big business came in. Mr. LAY. An American business man? Mr. MOORES. No; an Argentine came in and asked for a reference to people in the United States to whom he could write for the purchase of saws and files and the consul said in the presence of this Member of Congress that he was forbidden by the department to give him any reference. Mr. LAY. A bank rating? Mr. MOORES. No. He asked for people to whom he could send an order for saws and files and for bids on saws and files, and he was told that it was a rule of the department not to give names of dealers. Mr. LAY. There must be some mistake there. Mr. MOORES. The consular officer said that and this Member of Congress said he wrote down names of file works in Philadelphia which he knew about and saw works and that he heard the consular officer refuse to give a reference to anybody in the country. Mr. LAY. There must be some misunderstanding about that. Mr. LAY. None whatever. In fact, the State Department_encourages consuls to assist American exporters in this way. At Cape Town we had a bureau of the office devoted entirely to catalogues and had thousands of American catalogues there where South African merchants came and saw these catalogues, inspected them, and we encouraged them to come to the office to get names. That is one of the principal duties of a consular officer. Mr. MOORES. That was my impression, but that story bothered me and Doctor Temple. Mr. COLE. It simply involves the expression of preference among dealers. Mr. LAY. There is one other point. I have read over this bill very |