between grade levels, adequate within-grade pay ranges, and adequate pay spreads from entrance to top career levels.

Considering the impact of all these factors on the pay of career civil servants under the Classification Act, it is clear that a pay raise of a flat amount or a percent applied across the board will not accomplish this. It would instead perpetuate existing problems.

Comparability with private enterprise salaries-the second basic principle of the proposed salary reform plan-is not an entirely new idea. As a matter of fact, it has been recommended time and again as the way in which rates should be determined for Federal whitecollar workers. But it still remains a goal to be achieved. The studies go back to 1928 and they show, without exception, I believe, that the majority of prominent executives, educators, and professional men who have looked into the matter favor paying Federal employees, including those in top executive positions, at rates comparable to those paid for similar work in the private sector. The Hoover Commission, the Committee on Scientists and Engineers for Federal Government Programs, the Defense Advisory Committee on Professional and Technical Compensation, and the Interdepartmental Committee on Civilian Compensation all supported this conclusion. Most recently, the President's Advisory Panel on Federal Salary Systems, chaired by Mr. Clarence Randall, has recommended external comparability as "equitable *** valid, and eminently desirable."

In view of the general agreement on the method of pay determination to be used, why should action to adopt such a method have been held in abeyance so long?

One answer seems to be the failure, up to this time, to establish procedures for obtaining reliable data to show that general pay adjustments are warranted. This failure has been overcome. The Bureau of Labor Statistics has expanded its occupational surveys to obtain data that can be used to determine comparability on an annual basis.

Title II of the bill, H.R. 10480, provides the basic adjustments in salary schedules and grades needed to carry out the objectives of salary reform.

Previous testimony before this committee has identified some of the different kinds of career civil servants whose pay will be adjusted if this bill is approved. Employees engaged in the effort to place a man on the moon, developing modern weapons for our country's defense, controlling traffic of jet-propelled air carriers flying at near sonic speeds, combating the smuggling and sale of habit-forming drugs, and operating the largest hospital system in the free world have been mentioned.

In the Department of Agriculture, there are also many loyal, highly capable employees at work, all of whom we would sorely miss if they decided to leave tomorrow, as they well might, for better-paying positions outside the Federal Government. Some are research scientists studying how to conserve the Nation's soil and water resources, protect its crops and livestock, and improve food and human nutrition. Some are veterinarians on meat and poultry inspection and animal disease eradication work. Some are foresters engaged in promoting the conservation and wise use of the country's forest and related range, water, and other natural resources. Some are economists and marketing specialists studying the Nation's production-consumption imbal

ance, problems of the domestic food market, and our export policies and programs. Some are engineers, extension specialists, and professional agriculturists developing programs to eliminate rural poverty, increase rural industrialization, and commercial enterprises, and create strong family farms.

The Department has experienced increasing difficulties in recent years both in recruiting able people to fill these jobs-and in retaining highly trained employees who are offered higher salaries by organizations outside the Federal Government.

As members of this committee undoubtedly know, the Department places particularly strong emphasis on the recruitment of highly trained and competent persons for its agricultural research programs, including fundamental, applied, and developmental research relating to the production, utilization, and marketing of the Nation's farm and forest products. Here the problem of attracting and keeping the kinds of employees needed is especially critical; but the efforts we make in this connection are frequently unavailing, owing in large part to the growing gap between public and private pay.

May I illustrate in this manner: We reviewed our record of gains and losses in employment in the research and development area last fall. The analysis showed a loss to non-Federal establishments during the fiscal year ended June 30, 1961, of 16 scientists in grades GS-13 to 15, eight of whom were rated as outstanding in their field. Two of the outstanding employees were leaders in soil and water research. They left to accept salary increases of 50 percent more than the Department of Agriculture could pay them. Three others left to take State university positions at substantial increases in pay. While the rest of those leaving their Federal positions did not give inadequate pay as the reason, it is safe to assume that more attractive salary offers weighed heavily in their decision.

During the same period, death and retirement accounted for 15 additional losses in the research area in grades 13, 14, and 15. Six months later these positions either remained unfilled or had been filled at a lower grade level by employees with good potential for leadership in research administration-but without the years of experience needed to take over the broad scope of activities which the previous incumbents had under their control.

Offers to fill two of four vacancies created by the retirements I have mentioned were refused because the prospective replacements felt the pay was inadequate.

Our Western Utilization Research and Development Laboratory in California recently made a survey to determine the likelihood of further losses occurring as a result of employees accepting offers of better-paying positions outside the Federal Government. Nineteen. of their present employees revealed they had received a total of thirtyeight job offers during the year. Included among the 38 offers was 1 with an egg company up to $30,000 a year; 1 with a farm association with a minimum salary of $20,000 a year; 1 with a flour company at a salary of $16,000 to $18,000 a year; 1 with a textile firm at a salary of $25,000 plus travel and living expenses. A beer company offered $12,000 a year to one of the GS-12 employees in the group. A tobacco company offered him $13,000. These are all typical offers. While none of the employees had left the laboratory

at the time the survey was made, most of them are men with families to support and other personal responsibilities that make our continued ability to retain them rather doubtful.

The Department's efforts to attract trained and competent professional and scientific people to our positions are unremitting, of course, but the results, as I have already indicated, are frequently discour aging. Our Northern Utilization Research and Development Laboratory in Peoria, Ill., is a large employer of chemists and chemical engineers. At the annual meeting of the American Chemical Society in September 1960, laboratory officials obtained and screened 462 applications, interviewed approximately 50 of the applicants, and selected 16 for followup interviews in an attempt to interest them in employment. The net result: one appointment.

At a similar meeting in March 1961, laboratory officials screened 291 applications, interviewed 66 applicants, and again received refusals from all but one applicant. Invariably the reason given for refusal in all of these cases was that the salary we were able to offer was considered inadequate.

Excluding the efforts at the two professional society meetings, here is the record on the recruitment work for the Peoria Laboratory during fiscal year 1961:

To fill chemical engineer positions, GS-9 through GS-12: Total offers, 8; refusals, 8.

To fill other positions, GS-9 through GS-13: Total offers, 53; refusals, 43.

Offers were made only after the laboratory had completed a rather extensive investigation of each applicant and the applicants had each indicated an interest in the work. Refusals are therefore a definite item of expense to the Government. One of our laboratories had to cancel planned recruitment visits to several universities in its vicinity because none of the graduating class expressed interest in being interviewed. The reason given most frequently for lack of interest was the relatively low salary.

The experience of the Peoria Laboratory in the North is matched by that of our southern laboratory in New Orleans. During fiscal year 1961, the New Orleans laboratory officials wrote 430 recruitment letters to colleges and other contacts, made 92 telephone calls, interviewed or contacted 55 persons through professional society meetings, and considered responses from 19 persons inquiring about paid job advertisements in Chemical and Engineering News and from 27 other applicants. Net result: one new Ph. D. added to the rolls during the fiscal year.

Another aspect of the problem is illustrated by the present experience of the Rural Electrification Administration. This agency, as you know, administers the rural electrification and telephone loan programs, which requires the employment of highly trained electric and telephone engineers who work closely with REA borrowers on the complex technical problems involved in their operations. A recent study by REA disclosed that 223 out of 972 of their present employees, 23 percent, are 55 years of age or older and are, or soon will be, eligible for retirement.

It is essential that replacements for this group be hired and trained in the next few years if REA is to continue an effective program. REA has, for several years, made a strong effort to recruit engineers

from graduating classes of colleges all over the country-with only limited success.

This year, for example, REA interviewed 128 graduating electrical and telephone engineers at 38 colleges in an attempt to fill 20 critically needed positions. They were successful in persuading only three to accept a job-two in the electrification loan program and one in the telephone loan program. REA's inability to attract qualified engineers is directly attributable to its inability to compete with the salaries offered by industry. Unless the type of salary adjustments proposed in this bill are achieved, the orderly development of the REA programs will be seriously jeopardized.

Titles III, IV, and V of the proposed bill do not affect the Department of Agriculture.

Title VI repeals the statutory provisions establishing salaries for certain officials in the Department. These are positions now paying $19,000 or $20,000 a year. It is assumed that these positions would be classified at least as grade GS-18, and under the revised salary schedules in the bill the incumbents would receive $20,315 during the first year and would ultimately receive $24,500. The positions affected are the Administrators of the Agricultural Stabilization and Conservation Service, the Rural Electrification Administration, the Farmers Home Administration, the Soil Conservation Service, and the Forest Service the Manager of the Federal Crop Insurance Corporationand the Administrative Assistant Secretary of Agriculture.

Title VII of the bill would adjust the salary rates for certain scientific and technical positions established under Public Law 313 and similar legislation. These are positions for which special salary rates have been established in the Department in recognition of the need to adequately compensate outstanding research scientists and others. The salary adjustments in the bill would result in some increase in pay for these positions.

In summary, we in the Department believe that the provisions in this bill will go a long way toward establishing for the public service the attractiveness it must have to obtain its fair share of skilled, highcaliber men and women and to compensate them in a reasonable way for the work they will do or are doing, so that they will be satisfied to remain in the Government service.

Finally, Mr. Chairman, as your letter to the Secretary indicated, the proposed legislation will have a material effect on Government finances and we in the Department of Agriculture have sought to make an estimate of the cost to us. In line with the method followed in the committee analysis of the proposal, we have made a projection of annual costs based on the number of our full-time employees under the Classification Act on June 30, 1961, as distributed by grades. The results show increased costs of about $51 million for the three phases of the salary increase, of which $22 million is for the first prase. This is only an approximation, of course, since we have dealt only with full-time employees and not considered part-time and intermittent personnel, or future changes in numbers and grades.

While our estimates show a total additional cost of $51 million or more, we believe that adoption of the proposed legislation will be in the best interests of the Federal Government. Our programs are vital and substantial, but our salary rates are not competitive, as they must become if we are to attract and keep the high-quality personnel

we need to carry out our responsibilities. The additional cost is reasonable when the salutary effect on the public service is considered. If service to the public can be placed on a comparable plane with service in private enterprise; if Federal rates and grades can be alined to provide greater incentives; if the needed flexibility for administering the system is provided; then we believe the national security and general welfare will be materially enhanced and the money involved will be well spent.

Mr. MORRISON. Thank you, Mr. Under Secretary.

Mr. DULSKI. The REA receives a subsidy from the Government, does it not?

Mr. MURPHY. The REA is a Government agency and it receives appropriations from Congress. This agency in turn makes loans to electric and telephone co-ops to build electric power distribution and telephone systems.

Mr. DULSKI. And in direct competition with private enterprise? Mr. MURPHY. It does compete with private electric companies in

some cases.

Mr. DULSKI. You have only been able to recruit one Ph. D. What is the salary offered in private enterprise?

Mr. MURPHY. I would not have in mind a figure. We know, generally speaking, the salaries these people can get in private enterprise are sufficient to make them unavailable to us.

Mr. DULSKI. You have no figures for comparison?

Mr. MURPHY. I have none in mind. I would supply some for the record if you would like.

Mr. DULSKI. I would appreciate it very much.

Mr. MURPHY. Yes.

(The information requested follows:)

AVERAGE BEGINNING SALARIES OFFERED BY INDUSTRY TO BACHELOR DEGREE

CANDIDATES IN ENGINEERING

The Metropolitan New York College Placement Officer's Association survey of 35 eastern colleges, reported in the June 1961 Engineering Employment Practices Newsletter, set the average electrical engineer beginning salary at $562 per month. The salaries accepted by electrical engineers during 1960–61, reported in the October 1961 Journal of College Placement, also was found to be about $562.

In the 1962 recruiting year the beginning salary offers in the electrical engineering category was somewhat higher. The Salary Survey 1961-62 Recruiting Year is a report prepared by the College Placement Council Inc., using data collected from 82 participating colleges and universities, and based on a cumulative total of over 5,000 offers made to candidates for bachelors' degrees. This report finds $570 to be the average beginning salary offered by employers interested in hiring electrical engineers.

In competing with these industrywide salaries, the Rural Electrification Administration is able to offer $444 per month to the average candidate for bachelor's degree. To an individual who is among the top 25 percent of his class, or who has a scholastic average of B or better on completion of all his requirements for the bachelor's degree, we are able to offer $529 per month as an entering salary.

Mr. GROSS. Mr. Murphy, reading and hearing your statement, I get the impression that you think you support this pay raise bill, the socalled reform and pay raise bill, for the reason you want to reward efficiency, honesty, and loyalty in your Department? Am I accurate in that assumption?