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CONCLUSIONS

In conclusion, may I say that the railroads are opposing this bill for economic reasons. It is, I believe, the desire of railroad management that employees of the railroad industry be accorded all the assistance and protection they may be reasonably afforded.

We do not believe that the contribution rate of 3 percent on salaries up to $300 per month will support the scale of benefits provided in the bill, and if these contributions fall short of the requirements, then only three courses are left

open; the first being to reduce the scale of benefits; the second being to increase the rate of contributions which should be borne by the employees; and/or third, to make appropriations from general funds of the Treasury, which, of course, originate from taxes.

Regardless of what has been said or may be said with respect to the estimated cost of benefits under this plan or any other plan, I submit to you that there are no reliable figures available which will afford anything but the broadest assumption.

Mention has been made of the study made by the Federal Coordinator of Transportation which only embraced seven railroads and covered a period from July 1, 1924, to December 31, 1933. These seven railroads (Baltimore & Ohio, Boston & Albany, Delaware & Hudson, Kansas City Southern, Soo Line, Northern Pacific, and Oregon Short Line) represented about 8 percent of the employment in railroad service during the period. It is only necessary to point out that this study was undertaken more than 10 years after the beginning of the period, and therefore was necessarily confined to such historical facts as were available. It must be remembered that no particular effort had been made to record information for the purpose of such study.

The general plan followed by railroads in keeping personnel records is to show the date of employment, transfers and promotions, any unusual circumstances, and date of separation from service and cause where known. In many cases it is entirely impossible to know the actual date of separation from service for the reason that employees often take “French leave” and the only thing that can be relied upon is the last date that the employee worked. Records are not generally made, and it is doubted that they existed on the railroads studied by the Federal Coordinator, to show what happens to an employee after separation from service. Doubtless the study made was as complete and accurate as could be obtained by a post mortem beginning more than 10 years after the commencement of the period, but we still insist that any such records are wholly unreliable for the purposes here required.

In the first place, it cannot be stated with any degree of accuracy whether or not the seven railroads studied by the Federal coordinator were representative of the turn-over in employment on the railroads of the country as a whole during the period covered, and, secondly, if the employment on these seven railroads during the period covered were then typical of the turn-over in railroad employment on all railroads in the country, that does not mean that it is now typical or will be typical tomorrow. Therefore, we submit to you that any statistics that may have been obtained by the Federal coordinator were simply the best that could be obtained from records not maintained for any such purpose and that there is serious question as to whether these railroads were typical for the period covered and a still more serious question as to whether the employment on those railroads for the period covered is typical today or will be tomorrow. It is our most sincere conviction that no statistics exist today which can be taken as a reliable source for actuarial determination. Any estimates made are mere statistical guesses.

Another important item is that of added cost, and we believe that the accounting cost under this bill would be many, many times the cost incurred or to be incurred in the operation of State schemes.

At this point, Mr. Chairman, I want to say that before I left Chicago, day before yesterday, I made some inquiry to get some information for my own use, that I had no intention of presenting here; but some of the questions that were raised yesterday prompted me to reduce the data to exhibit form, and I would like to place a copy in the record, and give you copies, as this may answer some of the questions that have been raised.

Mr. MARTIN. That leave will be granted. (The statement referred to is as follows:)

ILLINOIS CENTRAL SYSTEM Analysis of benefits awarded to former employees in the States of Louisiana, Missis

sippi, Tennessee, Indiana, and Minnesota, and the amount of the benefits which would have been awarded these individuals under the provisions of the proposed bill based on the latest figures obtainable

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Mr. LAWLER. May I say that this is a chart to represent the condition of our own railroad, where four States began paying benefits in the early part of the year, one only very recently. The figures in this statement show the number of individuals, of whom we have record, that have filed claims in the States and have been awarded benefits. This number of individuals is split up as between various salary ranges, comparable to the benefit scale in this proposed bill.

The headings are self-explanatory.

Mr. Martin. Mr. Lawler, this is a very excellent and simple table, as I can see at a glance. For the sake of saving time, I think you had better let me ask you a question.

Mr. LAWLER. All right, Mr. Chairman.

Mr. MARTIN. I notice that under the head of State benefits awarded the amount is $152,450.

Mr. LAWLER. Yes, sir.

Mr. MARTIN. And under benefits payable to these individuals under the proposed bill, the amount is $225,260.

Mr. LAWLER. Yes, sir.

Mr. MARTIN. That would show an increase of around $72,000? Mr. LAWLER. It would, Mr. Chairman.

Mr. MARTIN. Now, it has been claimed by practically all the opponents that the benefits carried under this bill will completely exhaust the fund, but it is also clear that no additional burden can be placed on the railroads until we have new legislation, and at least the carriers, if that situation develops, will have the satisfaction of being able to say to the other fellows, “I told you so."

Mr. LAWLER. Mr. Chairman, may I explain this term "benefits awarded'? When a man becomes unemployed, he files an application for benefits, and after considering the case the State gives us advice that the employee is eligible to receive so much in benefits, and the amount here shown is the amount determined to be payable to the man this year, if he is unemployed. This same figure is projected into figures under the bill. All of thsee men have received or are receiving benefits. Just what they have been actually paid to date I do not know, but the figures here represent the State's determination of what they are eligible for this year. Of course, if they are not unemployed the full time to take up their full benefits, the amount would be correspondingly reduced under the adjoining column headed “Benefits payable to those individuals under proposed bill.

This statement only shows what has happened to date. It does not purport to show all the claims that have been filed, for I have no information on that question. There may and probably have been many other claims filed, some of which have not been passed on, and others which may have been declined by the States for any of a large number of reasons. Another thing to remember is that these States have only been paying benefits for a very short time, and doubtless there are many potential claimants who have not yet presented claims because they are not familiar with all the possibilities of the plan. But people soon learn of their opportunities and doubtless many delayed claims will be filed early enough for handling. It is my judgment that in the kind of claims I have just mentioned, that low-salary groups will greatly predominate, so that eventually the comparison between the benefits allowed under the State plans as against the benefits proposed in the present bill will indicate a far more liberal allowance under the bill than is indicated in this exhibit.

And, finally, the railroad industry has a definite relationship to the objectives of local governments of the States in which they operate. Until such time as the present State systems have had a fair and reasonable trial and the State administrators have had an opportunity to simplify and unify their procedure, we submit that no attempt should be made to disrupt the orderly procedure of their experiment.

I thank you for your indulgence, Mr. Chairman.

Mr. MARTIN. Thank you very much, Mr. Lawler. You may extend and revise your remarks in the record; and that applies to all who have appeared before the committee.

The remaining witness for the opponents is Mr. Souby. Mr. Souby, we shall be glad to hear you now.

STATEMENT OF J. M. SOUBY, ASSISTANT GENERAL COUNSEL,

ASSOCIATION OF AMERICAN RAILWAYS

Mr. Souby. Mr. Chairman and gentlemen of the committee, so far as the detail sof the bill go, they have been adequately covered by our witneses. I have only a few rather general questions to which I wish to draw attention.

Dr. Parmelee stated in the beginning of his testimony that the bill here raises two fundamental issues. One is as to the desirability of separating these railroad workers from the general unemployment scheme which we have set up now in the country, and setting them up in a separate Federal scheme.

The second question is, assuming that to be desirable, is this proposed bill here a satisfactory dealing with the matter?

Now, that latter question we have covered fully and I do not think the committee is left with any doubt as to what we think the answer is as to that last question. It is emphatically that this bill will not do, even assuming that we should have a separate Federal system of unemployment insurance for the railroad employees.

But it is on the first question that I wanted to make a few statements. We do not know what the answer to that is.

Mr. Martin. There is one answer that is quite obvious, and that is that the State unemployment insurance for railroad employees is an anomaly in railroad regulation. There is not any other exception that I know of in regulating the railroads of the country by State agencies instead of Federal.

Mr. Souby. If I had time, I would like to go into that. But there are two or three rather general thoughts that I wanted to get to the committee, if I can.

Our position is that so far as the factual answer to the question is, we do not know what it ought to be. It may well be that we will some day welcome a separate scheme of this sort. But I wanted to make clear what out position is at this time. And that is simply that we do not think this is the time to try to do it, because we do not think the committee has any more information on it than we have. And we know that we do not have enough to enable us to make up our mind on the question.

So we are asking frankly that you delay the matter until you can get sufficient information on which to act intelligently and with some assurance that you are acting correctly.

Now, that is not merely a plea for a delay, in the ordinary sense, because we have now under operation a scheme from which we will get the necessary information, one of the purposes of which was, as suggested by the committee that recommended it, that it would enable us to secure statistical data which is now so sorely lacking and which is absolutely necessary, if we are going to deal intelligently with this whole problem of unemployment.

In asking for delay here we are not without some precedent. If you understand the application of this bill that is here before you, you can see that there is no rush to pay a man anything after he gets out of work, under the bill.

Suppose your bill were in effect now. I go in to Mr. Latimer, and I say to him, “I am an old railroad man. I am out of a job. I am hungry. I have not had any work for the last 2 months. I cannot

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find another job and I understand you have got a scheme here to take care of just such fellows as I am.'

Mr. Latimer says, “We surely have. When did you work for a railroad?"

"Well,” I say, "I worked for them 3 or 4 months.". "How much did you earn?”

' "Well, I earned about $250 but, of course, it cost me practically all of that to live while I was earning it and what little I had left I bet on the favorite in the Kentucky Derby and, of course, lost that.”

Mr. Latimer says, “I am not interested in what you did with it. But when did you earn this money last?”

"Well, the first part of this year."

Mr. Latimer looks up at the calendar and he says, “This is just June. Did you earn anything the year before last with the railroad?

I say, "No. I did not work for a railroad the year before last. What has that got to do with it?”

"Well," Mr. Latimer says, "that's too bad. You have not got any base year. I cannot give you anything. By the way,” he says, "did you earn anything last year?

I say, "No; I did not get anything last year, either."

Mr. Latimer says, “Well, that is still worse, because if you did earn something last year, if you would come in to me in July of this year, I could give you something. But since you did not earn anything except the first part of this year, if you will come to me after July 1 next year I will figure out what you are entitled to and give you something

Now, that is exactly what this simple bill that Judge Hay has been telling you about provides with respect to relief in certain cases. I did not say my illustration is typical or representative, but it does apply just that way, as Judge Hay so clearly explained when he told us how simple it was and how fine in its operation it was.

Mr. MARTIN. On the other hand, that is not going to cost the carrier anything, is it?

Mr. SOUBY. Now, I want to ask, what is the hurry about this legislation? We are not asking you to leave these fellows without any protection while you are waiting to learn whether or not this proposal is a desirable one.

So far as the better-paid men go, they have just the same protection now under these State systems that these gentlemen are proposing to give them under this new system. It is only this poor fellow I was just speaking of, and fellows that fall somewhat in his category, that will not be as well treated as they would be under this bill, except he would not have to wait quite so long in some instances under the present system as he would, in some instances, under the new bill.

Mr. MARTIN. Well, some of these payments would be so small that it would be hardly worth waiting for.

Mr. Souby. That is true. The point I am trying to make is that there is not any real need for this rush act that these brothers are trying to put across here. Speaking frankly, that is what it is. They are trying to rush through here, in the later stages of a busy Congress, a bill nobody has any chance to understand and it deals with a subject with respect to which nobody knows very much, as I am trying to impress upon you.

Now, I think that in making an objection to the effort to put this thing through in a rush, we have a right to expect of this committee

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