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to the collection of the contributions, provisions of law applicable to the collection of taxes imposed by sections 600 and 800 of the Revenue Act of 1926 are made applicable. It is suggested in passing that if a tax is intended, it may be found advisable to avoid some controversy or doubt on this important matter by levying a tax, expressly designated as such.

Section 8 (h) after providing that provisions of law with respect to taxes imposed by sections 600 or 800 of the Revenue Act of 1926 shall be applicable, insofar as not inconsistent, to the contributions, contains a proviso that all authority and functions conferred by such provisions upon any officers or employees of the United States, except the authority to institute and prosecute criminal proceedings, shall be vested in and exercised by the Railroad Retirement Board or such officers and employees of the Board as it may designate. Similar authority is granted in section 2 (g) in the case of payments required of employers when benefits are paid with respect to a period for which it is later determined that remuneration was payable. This would confer upon the Board, or any of its designated officers and employees, all powers now conferred upon the Secretary of the Treasury, the Commissioner of Internal Revenue, and collectors by internal revenue laws applicable generally or in the case of taxes imposed by the sections mentioned. For example, the p:ovisions of internalrevenue laws relating to compromise of civil and criminal cases, examination of books and witnesses, liens for taxes and their enforcement, penalties, returns, assessments,

and refunds and credits are apparently intended to be made available to the Railroad Retirement Board or its designated employees in the same manner as they are now available to the Secretary, Commissioner, and collectors in connection with internal-revenue taxes. Unnecessary duplication of facilities and functions, and possibly conflict in administrative policies and interpretations developed under the same provisions of law, will result, if another agency is permitted to function, even in a limited field, in the tax-collection activities of the Federal Government. In this connection the result is the same even though the contributions are not intended to be, and are held not to be, taxes. This Department is opposed to the collection of taxes or to the collection of contributions or other payments (even though not taxes) under provisions of law relating to taxes, by any other agency than the Treasury Department notwithstanding the fact that the proceeds are to be devoted to carrying out the functions for which such other agency was created.

The Treasury Department is also opposed to the proposal that a special fund be established for meeting costs of administration. There is no apparent reason why 10 percent of the amounts collected under the bill should not be covered into the general fund of the Treasury as are the similar receipts now collected under title IX of the Social Security Act. The Treasury Department favors the payment of administrative costs through the medium of annual appropriations out of the general fund of the Treasury. In this manner, the amount to be expended may be justified currently to the Congress, and the possibility of an unwarranted drain on the Treasury may be minimized. This Department is particularly opposed to that provision of the bill which would add to the proposed fund for administrative costs, the amounts collected from employers (as defined in the bill) during past years. These amounts have, of course, been covered into the Treasury and have already been expended for general governmental purposes. Such purposes included, among others, grants to States under title III of the Social Security Act to assist them in administering their unemployment compensation laws.

It is noted that section 10 (b) of the bill would authorize the Railroad Retirement Board to distribute benefit payments. This Department believes that the handling of checks and other media of payment by the same officer or agency that certifies to the correctness of such payments is an unsound procedure and one which should not be countenanced by the Congress.

In connection with the provisions of section 10 (a) of the bill, relating to the account for payment of insurance benefits, this Department fails to see any warrant for the concluding sentence which reads as follows:

"Notwithstanding any other provision of law, all moneys credited to the account shall be mingled and undivided, and are hereby permanently appropriated to the Board to be continuously available to the Board without further appropriation, for the payment of benefits and refunds under this Act, and no part thereof shall lapse at any time, or be carried to the surplus fund or any other fund.”. No similar language is employed in title IX of the Social Security Act. There is no necessity for an appropriation inasmuch as the funds involved will not be covered into the Treasury. It is the view of this Department that the language used in this connection should conform as closely as possible to that used in title IX of the Social Security Act.

In view of the foregoing, the Treasury Department recommends that the bill (H. R. 10127) be not enacted into law.

The Department is advised by the Bureau of the Budget that the proposed legislation would not be in accord with the program of the President. Very truly yours,

WAYNE C. TAYLOR, Acting Secretary of the Treasury.

STATEMENT OF THOMAS C. CASHEN, PRESIDENT OF THE SWITCH

MEN'S UNION OF NORTH AMERICA, 3 LINWOOD AVENUE, BUFFALO, N. Y.

The CHAIRMAN. Mr. Cashen, how many witnesses have you this morning?

Mr. CASHEN. Judge Hay will probably be the only witness we will put on today.

The CHAIRMAN. Very well. You are going to make a statement, are you not?

Mr. CASHEN. Yes, sir.
The CHAIRMAN. You may proceed.

Mr. CashEN. My name is Thomas C. Cashen of 3 Linwood Avenue, Buffalo, N. Y. I am president of the Switchmen's Union of North America, but I appear before your committee today as the chairman of the committee on unemployment insurance of the Railway Labor Executives' Association. I speak, therefore, not only as a railroad man myself, not only for the members of my own organization, but also for the 20 standard railway labor organizations, which include in their membership substantially all of the approximately 1,000,000 railway workers in the United States.

To conserve the valuable time of your committee, we have prepared for each member, a summary of the major provisions of the bill and an outline of the reasons why we favor its passage.

Mr. CROSSER. Do you want to finish your statement without interruption, Mr. Cashen?

Mr. Cashen. I refer to that a little later, Mr. Crosser. I shall therefore make this opening statement very brief. It would be better at this time not to enter into the discussion of the technical features of the bill. I should like to suggest, therefore, that your committee defer any questions until I have completed my statement, which will tell you about the background of this legislation and about one or two of the main reasons why the railway workers of this country want it enacted.

Mr. EICHER. Mr. Chairman, in line with the witness's suggestion, I make a motion that the committee withhold any questions until after all of the witnesses have concluded their statements.

The CHAIRMAN. Is there any objection to that procedure? If not, we will proceed by that method.

Mr. CASHEN. Following me, Judge Hay will discuss the provisions of the bill, in whatever detail you think necessary, and we will introduce a few expert witnesses who are specially qualified to assist the committee in its deliberations on this subject.

About 2 years ago the Railway Labor Executives' Association began to work on this type of protection against the increasing hazard of unemployment, and discussed the problem with the Association of American Railroads. We had a bill drafted along the general lines of State unemployment compensation laws. It was probably a good bill, but we couldn't understand it. It was too complex. Under it, as under the present State laws, no worker would ever really understand his rights. So we appointed a subcommittee of the Railway Labor Executives' Association to study the subject primarily with a view to simplification. We had several different bills drafted one after another. They were studied by our subcommittee and the chiefs of the railway labor organizations, until finally we arrived at the present bill, which we believe to be the simplest and soundest bill for unemployment insurance ever introduced into any legislature in this country.

It will be simple in its administration. Both railroad retirement and unemployment insurance will be administered by a single agency, on the basis of a single set of reports, from exactly the same employers, paying what is in effect a single tax because the contributions are levied on exactly the same wage base as the taxes under the Carriers' Taxing Act.

It will be simple to understand. The bill doesn't contain a single formula that will take three lawyers and five statisticians to untangle. Benefits are payable at six rates according to a worker's total compensation in the preceding calendar year. When the Railroad Retirement Board sends each worker his annual compensation statement, that will at once tell him whether he is eligible for benefits or not, and, if so, in what amounts and for how long. Further, the bill provides that relatively larger benefits will go to the lower paid workers who are most likely to become unemployed, and, that, if a worker is eligible at all, he will be eligible for a substantial minimum amount, enough to really mean something to him, and enough to justify the cost of writing his check. Under this bill, there will be no checks for a very few cents, such as we are told some States are paying under their present laws.

When we had the bill nearly in shape, we asked the Association of American Railroads to confer with us in the hope that we might introduce this to you as an agreed to bill. We met with their committee of railroad presidents and each group appointed a special committee to thrash the matter out in detail. After the subcommittees had worked on the subject for some weeks, our special committee again conferred with the railroad presidents but, although we are reasonably certain that some railroads are in favor of this bill, we found that they would not agree to support it. We never really understood their excuses but we think we know their real reason. Apparently they feel that if they agreed with us to support this bill, they would be obligated to continue to pay contributions no matter what happens to the State unemployment compensation plans. We don't know whether any of these State plans will collapse—we hope notbut we were told by some of the presidents, in almost so many words, that they would not support any Federal law until it was evident that the State laws were here to stay.

Perhaps at this time I should emphasize that this bill will not cost the railroads a penny; that, in fact, it will save them several millions of dollars. We know definitely that it will save them at least $1,200,000 a year in decreased taxes, and we firmly believe that it will save them $3,000,000 or more a year in decreased costs of social security accounting and reporting. When this bill becomes effective, the railroads will simply continue their present reports to the Railroad

Retirement Board and will stop reporting to each of the many States in which they have employees covered by an unemployment compensation law. We confess, frankly, that we didn't draft the bill for the purpose of saving money for the railroads, but we found quickly that any plan of social insurance that could be simply administered—and no plan is sound that cannot be easily administered—would automatically mean a substantial saving to employers. When the railroads are pleading poverty so vigorously, it is curiously inconsistent for them thus to reject certain and almost immediate savings of several million dollars a year. Perhaps they feel so poor, that they have got to the point where they cannot think in terms of less than hundreds of millions of dollars. At the present time they appear to be afflicted with a wage-cutting complex and regard a saving of four or five million dollars as of no importance in the interests of economy.

Our association has had two principal objectives in this matter. We want a plan of unemployment insurance that any railroad worker can understand. We want a plan of unemployment insurance that is practical for railroad workers, that fits their needs and the conditions of their employment. I have already said that the passage of this bill will mean a landmark in the history of social-security legislation in the United States, because we know that all our members will clearly understand their rights under it. I want now to emphasize our second purpose.

I don't need to tell this committee that the railroad industry is a national industry and that all its problems are national in scope. This committee would not think of referring the President's recent message on the railroad problem to the legislatures of the several States. It would not think of passing back to the States the functions of the National Mediation Board, the National Adjustment Board, the Railroad Retirement Board or the Interstate Commerce Commission. Why should unemployment insurance be treated differently? We can never hope to get a workable system of unemployment insurance for railroad employees under 53 separate laws, each administered in part by several different agencies.

A satisfactory system of unemployment insurance for railroad workers must be Federal. All our argeements are negotiated without reference to State lines. Most of our members have seniority rights under these agreements. These seniority rights take no account of State lines. Telegraphers, for example, may bave rights over a whole system which runs through many States. Seniority rights may be confined to a single division but these often cross State lines, Washington to Philadelphia, Philadelphia to Jersey City, Jersy City to New York, for example, on the Pennsylvania Railroad. If our agreements about wages and working conditions take no account of State lines, why should State lines suddenly intrude to affect our rights to unemployment insurance?

Many railroad workers in the ordinary course of their duties perform service in several States. Under which law should they, when when unemployed, apply for benefits? A group of our workers on the Western Maryland Railroad recently applied at the Hagerstown office for benefits under the Maryland law. In due course they were advised that they were not covered by the Maryland law because contributions on their wages had been paid to Pennsylvania. They crossed the line to Chambersburg and applied under the Pennsylvania law but were again denied benefits because, although contributions on their wages had been paid to Pennsylvania, all their employment had been in Maryland and the contributions should have been paid to Maryland. These men are definitely entitled to benefits, but, as far as I know, they haven't yet been able to collect them from either State. When the State commissions themselves don't know, how can you expect the unemployed worker to know where he stands? Some of our members on the New Haven and Boston & Maine roads are fussing all the time about the State to which they should be reported for unemployment-compensation purposes. Massachusetts and Rhode Island have employee contributions; New Hampshire and Connecticut don't. It is human nature for the men to want to be reported not to Massachusetts or Rhode Island, but to Connecticut or New Hampshire, where they would not have to pay employee contributions.

In the ordinary course of their duties or in the exercise of their seniority rights, many railroad workers frequently transfer their headquarters from one State to another. The result is that when unemployed, they may be eligible for benefits under one or more than one law or may lose some or all of the rights to which they would have been entitled if they hadn't moved. The State unemployment compensation agencies are experimenting with an interstate plan for the payment of benefits but this means more red tape to snarl the worker and doesn't really assure him of any real protection against loss of benefit rights. These problems are not confined, of course, to railroad workers, but we constitute so large a proportion of both those workers who perform services in more than one State and those who move from State to State, that some State unemployment compensation administrators are frank enough to say they would be glad to get rid of the headaches caused by these movements of railroad workers. The railroad workers themselves would rather be covered, in this matter, as in all others, by a single Federal law, which would assure them of the same treatment regardless of the State in which they happen to be.

No group in this country realizes more than the committees on interstate commerce of the Congress that the railroad industry presents one of our most pressing national problems. This bill, it is true, will make only a very small contribution to its solution, but we firmly contend that we cannot afford to reject even the minor economies it offers, nor to miss an opportunity at this time to charge one of our best qualified Government agencies with the duty to study the ever more serious problems of railroad employment and unemployment. Our organizations have long argued that there may be unrealized possibilities, for example, in the regularization of seasonal employment on railroads. This could never be stimulated by State agencies that must confine their thinking within their State boundaries, for one solution of the problem might require seasonal transfers of workers from road to road across State lines. We not only want our special problems to be the subject of specialized study, but we want assurance that unemployment insurance for railroad workers will be coordinated with all the other activities of the Federal Government and with any of the future results of the deliberations of your committee which may affect the employment opportunities for our members.

We recognize that the transfer of our coverage from State laws will create some temporary problems but these are just one of the costs of

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