My home is San Francisco and I am employed at the present time at Lawrenceburg, Ind.

I was asked by the Secretary of Local No. 646 of the American Federation of Government Employees to present to the committee a letter that was addressed to Mr. James B. Burns, president of the American Federation of Government Employees, to present some views on this question, Mr. Chairman.

The CHAIRMAN. That is, you submit that for the record? Mr. McHUGH. Yes, sir. That is submitted for the record. (The letter referred to is as follows:)

Hon. JAMES B. BURNS,

President, American Federation of Government Employees,

Washington, D. C.

DEAR MR. BURNS: Pursuant to a vote of American Federation of Government Employees Lodge No. 646, I am writing you after a copy of a letter was given each member for a week's perusal, suggestions and changes, and this is the result:

There is a rumor that 148 investigators, alcohol tax unit, Internal Revenue Service, may be made storekeeper-gaugers by July 1. Last fall a large number of investigators were reduced to this grade.

As you may know that creates many problems, particularly salary changes. We further understand that the classification and salary changes of storekeeper-gaugers are being discused by officials.

Therefore, it seems to us an opportune time for your good office to take some action at this time.

These are some of the reasons storekeeper-gaugers' classification and salary should be raised:

1. Storekeeper-gaugers are the backbone of the alcohol tax unit, Internal Revenue Service, United States Treasury Department. In the fiscal year 1938, there were 1,233 storekeeper-gaugers who were directly responsible for the collection of $10,833,776.29 in rectification taxes and $231,815,990 in excise taxes on spirits withdrawn from bond. During the fiscal year of 1938, the 1,233 storekeeper-gaugers had under their supervision 37 industrial alcohol plants, 63 alcohol bonded warehouses, 39 denaturing plants, 285 rectifying plants, 143 distilleries (whisky, rum, and gin), 147 brandy distilleries, 289 internal revenue bonded warehouses, and 1.121 bonded wineries.

2. Storekeeper-gaugers have worked 51⁄2 years without an increase in salary barring promotions to another grade. Many have left the service and were replaced by new men at the same salary as those who worked there 51⁄2 years. The grade CAF-5 was established in 1929 during prohibition, but since then duties have become more exacting and more difficult and increased problems have arisen, and yet no increase in salary to boost up the morale and efficiency. 3. The storekeeper-gaugers often have to maintain two homes at a salary of $2,000 a year on account of rotation of storekeeper-gauger, their assignments limit to 6 months at a plant, and 90 days at a rectifying house. Some are forced to travel a great distance and cannot afford to move their family and furniture at their own expense.

4. These employees perform executive duties, and of necessity must be students and keep posted on the various regulations and their constant changes. Many officers subscribe to Law Report Service, and pay $25 a year out of their meager pay.

5. Storekeeper-gaugers must qualify under a bond. They pay $6.75 yearly premium on a $5,000 surety bond. In addition these trusted officers have to pay for their tax paid and entry stencils and facsimile stamps used in official busiThese payments are made without reimbursements.

ness.

6. The duties of storekeeper-gaugers in personally supervising practically all plant operation exposes them to great industrial risks and hazards and all kinds of weather. Some have to work in drafts and damp places and outdoors. These men have to pay a higher rate of life insurance on account of the risk in occupation.

7. Increases should be granted as an incentive and inducement to those who perform efficient and meritorious services over a period of years. It will keep experienced and well-trained men doing their utmost, and will keep up the morale and efficiency.

We sincerely trust that you will take appropriate action in this worthy

cause.

Respectfully yours,

AL. F. NEBELSICK,

Secretary-Treasurer, A. F. G. E., Lodge No. 646.

(Attached to letter is the following statement:)

For your perusal, suggestions, and changes. Proposed letter to be authorized and sent at our next meeting, April 22, 1940, at 4 p. m. Copies to be forwarded to Yellowley, Kennedy, Chicago, and Terre Haute lodges and others. Be at our next meeting.

Mr. McHUGH. I would also like to submit for the record a copy of the Storekeeper-Gauger; that is the official publication of the National Association of Storekeeper Gaugers, that expresses some views on H. R. 960.

The CHAIRMAN. That is just an article. You aren't submitting the entire magazine for the record?

Mr. McHUGH. No, sir. Just two articles. (The matters referred to, are as follows:)

THE EXECUTIVE CIVIL SERVICE

When the historians of tomorrow set themselves to their time-honored task of recording the events of today, we are wont to conjecture as how we and our current struggles shall be made to appear. These gray-bearded gentlemen in their perspective review, free from contemporaneous prejudices, shall write the verdict, and posterity shall marvel at our limitations.

Whatever "era" we are now entering, passing through, or closing, we are keenly aware that history is in the making. Wars, reforms, revolutions, and economic and social struggles shall constitute, depending upon the results, either a romantic or a tragic chapter in historic annals. Without wishing to encroach upon the jurisdiction of future history, we are sure that it must note the phenomenal expansion of the activities of the Federal Government of our age. Federal supervision and regulation of the social and economic life of the people has brought the influence of the United States Government into the humblest home.

Although this expansion is reflected most in the increase in independent agencies, it is also reflected in the increase in the personnel of the executive civil service. From a few thousand persons a century ago, this army of civil servants has grown to nearly a million. It is through this vast medium that the activities of the Government are brought directly to the people, and from the character of these representatives, the people form their estimation of Federal activities. "The greatest employer on earth," the United States Government, has a difficult problem, indeed, in dealing with the manifold problems arising from employer-employee relationship. Appointment, removal, pay, classification-intricate problems tax the ability of Congress, political scientists, and administrative experts. The enormity of the problem, however, is insufficient excuse for its neglect.

In recent years the Government has sought to advance the conditions of private employees. During this period it has paid but passing attention to the matter of its own employment problems, not the least of which is the matter of adequate compensation based upon a proper classification according to the duties and responsibilities of employees concerned. Unhappily, the work of personal classification with reference to the departmental service has not been extended to the field service. True it is that the classifications and grades established for the departmental service have been extended to the field service, but these classifications and grades, with their attendant salaries, are not wholly adaptable to the field service. The wider expanse of activities of the field service makes it difficult, if not impossible, to allocate all field positions to one of the grades and classifications devised for the departmental service. A detailed enumeration here of shortcomings of the present classification and compensation system would serve no useful purpose. Suffice it to say that it is a subject which should be given continuous and scientific study not only to establish a more equitable classification and compensation system but also to

the end that reallocations may be made when changing circumstances make it necessary.

One of the best examples of the inadequacy of the present system is to be found in the classification and compensation of the position of storekeepergauger. Notwithstanding the unfavorable circumstances surrounding the original allocation of this position and the subsequent increase in its importance, this criginal allocation has been maintained and not fewer than 75 percent of the present storekeeper-gaugers' force are still held to the minimum salary of the grade. Department officials have frankly recognized the fact that the classification is too low, but have found themselves helpless to rectify the situation because of insufficient appropriations for the purpose. Congress in considering appropriations naturally assumes that the classification and compensation of the position of storekeeper-gauger is adequate and that additional funds for salary purposes would be only for the purpose of favoring a special group over other groups of Government workers. It is hardly to be expected thai Congress, with many major problems pressing for its attention, may conduct a general examination of the adequacy of allocations of field positions. However, under the present system of compensation, it might well consider evidence of inadequate compensation of particular groups as bearing on the matter of appropriations.

Undoubtedly, the purpose of a $600 salary range within a grade was to permit promotions within such grade on considerations of experience and competency. Such policy is an incentive for energetic and competent effort. Without hope of award for meritorious service the employee is apt to exert little effort and initiative. This demonstrates the need for a scientific efficiency-rating system under which an employee would rise to the average salary for his grade upon maintaining a standard rating, and under which his salary above the basic pay would be contingent upon his maintaining a satisfactory efficiency rating. Exemplary of this shortcoming of the present system, again, is the position of storekeeper-gauger. Competent and efficient men with 5 years' satisfactory service are maintained at the entrance salary. Unless the whole executive civil service is to suffer and deteriorate in quality and morale to the consequent weakening of the Federal System, the problem of classification and compensation of the field service must be given immediate and thorough attention. The promotion of storekeeper-gaugers is especially acute, and unless adjustment can soon be made, final disappointment must soon result in a weakened morale to the decided detriment of the Internal Revenue Service.

SOME PROBLEMS OF STOREKEEPER-GAUGERS

INCOME

Two thousand dollars falls below the minimum health and decency requirements of a married man with family. In an executive capacity, the gauger must somehow contrive to maintain decent standards of living within his income. Many do this by outside employment, others manage only because of other sources of income, and in some cases the wife manages to contribute a share, many simply do not manage.

INDUSTRIAL HAZARDS

Required by regulations to personally supervise practically all plant operations, the storekeeper-gauger is exposed to innumerable industrial hazards. In addition, he may be required to be outdoors or in exposed places in all kinds of weather. A reflection of this condition is apparent in the rate-tables of insurance companies.

ROTATION OF ASSIGNMENTS

This "bogey" wrecks the budget of many a gauger. First, by causing him expenses for commutation or boarding away from home, for which he is not reimbursed in many cases; second, by often requiring him to maintain a car to enable him to reach remote and otherwise inaccessible plants.

REGULATIONS

The system of keeping gaugers informed on regulations which they must enforce has many serious shortcomings in spite of continual improvement.

Many officers subscribe at their own expense ($25 per year) to a Law Report Service which should be furnished by the department and probably could be at no greater expense than the present endless and fragmentary stream of mimeographed notices.

TRAINING AND CONFERENCE

Training services conducted by the department for storekeeper-gaugers would serve both the Government and the permittees. Little is being done in this direction at present. The gap between the field officers and the district supervisor's office is too great. Conferences between the two would improve the performance of duties and lead to a better understanding of problems and more uniform interpretation of policy and regulations. Practice-clinics might be valuable in ironing out many field problems.

RECOGNITION OF SERVICE AND MERIT

There should be some recognition of long service and meritorious work. Incentive and morale are more important factors in this service than in many others; any slackening of effort or lowering of efficiency directly affects both Government revenue and plant operation costs. Special consideration should be given to this important source of revenue which is at the same time so intimately concerned with the welfare of many private enterprises.

PERSONNEL ADMINISTRATION

There is ample opportunity for improvement in this direction. Due to the rapid expansion of the Alcohol Tax Unit in 1934 many undesirable conditions arose, some of which still exist. A closer study of personnel problems would be valuable and could eliminate many inequalities and detriment to efficiency.

Mr. MCHUGH. I helped organize that National Association of Storekeeper Gagers, State of California, and was charter member. For your information as to the specific problem of the storekeeper gagers I would like to ask you if I would be permitted to read you just what their duties are as stated by a Civil Service Commission announcement:

To have custody of all keys required to safeguard materials, spirits, and premises in grain, molasses, and fruit distilleries, bonded and tax-paid warehouses, bottling houses, and denaturing plants; to check all operations in such plants by actual measurement, accurate gaging and ebulliometer tests; to record data on forms; to have direct supervision of amelioration and fortification of wines; to test wine for sugar, acid, and alcohol; to secure necessary samples during processing for submission to chemists for analysis; to check premises and equipment to see that they conform to plans approved by the Bureau and that the plants are operated strictly according to regulations; to check periodically the accuracy of measuring and weighing devices used in plants; to see that all packages are properly gaged, stamped, and branded, that the proper tax is assessed, if any, and proper record made; to investigate losses and supervise the destruction of spoiled materials and the conversion of wine into vinegar; to see that proper reports are rendered by proprietors; to compile daily and monthly reports required by regulations, and to perform similar duties.

Now those duties are not regularly required in every district. And the object of Mr. Nebelsick's letter to Mr. Burns is to call the attention of the committee to the fact that it is now our understanding that certain members of the Internal Revenue Service such as deputy collectors are to be brought by the classified civil service into our work, and on account of the shrinkage, natural shrinkage of these positions because of the fact that storage of whiskey and spirits is reaching the saturation, naturally there will be a shrinkage of our positions, and that was the object of this letter.

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They also bring in some other points about salary increases. Now in relation to this work, the men that are being brought into it, I think I can say that in the last 3 to 4 years there have been very few that have come off of the civil-service list. The normal increase has been by adding men from the clerk's list. Those men have been retail inspectors and from there they are rated as storekeeper-gagers and in many instances they are rated as high as particular inspectors.

Now the salary of retail inspector is about $1,800 a year. The highest of the storekeeper-gauger is $2,000 and that of a senior inspector, or at least an inspector, is $2,600 a year. And these new men have come in and gone ahead practically of men who have had seniority. They do the retail liquor inspecting and are actually meeting the public every day. Most of them are also commissioned deputy inspectors of Internal Revenue. In the case of violations they are authorized to accept offers in compromise. In some instances I have seen, I think the average age of these men will be not over 27 years and I think in the matter of judgment the average veteran of more mature age certainly could fill these places better. That is a personal view.

I think it is in order to say here the statement of duties as read are those the law vests in U. S. S. G. In the district to which I am now assigned these duties are vested primarily in the officers in charge at the different plants, and the individual officer takes no responsibility whatsoever.

I am giving away no secrets when I say that the larger distilleries will average from 750 to 1,500 barrels of whisky per day of 8 hours. The individual gauger works 7 hours, and on the schedule mentioned two men working alternately average gaging from 1.8 to 3.6 barrels per minute for every minute of the working day. That means weighing the barrel for gross weight, deduction of the given tare weight to determine the net weight. The given tare weight is stamped on the side of the barrel. To determine net weight checking that figure against the chart on which the gallonage is figured for the particular proof and in addition to weighing the barrel, copying in the figures of gross weight, net weight, and wine and proof gallons onto the gage report, calling the figures to the company employee who stamps those figures with a numbered wheel onto the barrel and then checking back all figures as he calls them back for checking. In addition, each man checks the report papers of the man ahead of him. The work is nerve-wracking. There certainly ought to be more qualified men. But what the gaugers object to is that if the provisions of H. R. 960 allow the deputy collectors to be blanketed in, that may result in this reorganization, as a matter of necessity a reallocation of surplus personnel and these people are brought in at a higher salary base than the men now occupying those positions and that hold those salaries. At the same time we shall have to train them.

The same is true of Mr. Nebelsick's objection to investigators being brought back to gaugers but retaining higher pay.

I understand the Department is now contemplating on account of reduced appropriation to bring in about 160 investigators as of July 4 and reduce them.