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that have been worked out in this bill for handling the incumbents who are in the positions that will be brought in under civil service are practical, workable provisions, and, at the same time, are provisions which will safeguard the administration of the Federal agencies concerned.

Of course, as you know, the bill provides, as Senator George has pointed out, that the head of the department within the period of a year may nominate these persons for a noncompetitive examination, provided they have served for a period of 6 months prior to the effective date of the order. It has been alleged in some quarters that possibly the noncompetitive examination would not be much of an examination after all, and that it is simply a convenient device for insuring the fact that all of the incumbents in these positions would be taken care of satisfactorily.

As the committee knows, the Commission, since February 1, 1939, has been receiving, from various departments of the Government, nominations for noncompetitive examinations of incumbents who are in positions that have been brought in under civil service by the President's Executive order of June 24, 1938. Up to the present time 28 percent of those who have been nominated to the Civil Service Commission have failed to acquire civil service status, which I think is ample proof of the fact that the noncompetitive tests or standards that will be set and that have been set by the Commission are not a joke by any means.

The Commission's noncompetitive examinations are substantially the same kind of examinations that are given in an open competitive test, with credit being given, and I feel rightly so, for the experience that the person has had on the job. I feel sure that this committee, and the Congress, and the country, can be assured of the fact that the Civil Service Commission will administer these noncompetitive tests in such a manner that there will be strict adherence to the standards that we have set and that we will continue to set.

The CHAIRMAN. That is, your noncompetitive examination is just as severe as the competitive examination

Mr. FLEMMING. That is right. It is substantially the same type of examination with credit being given for experience. Of course, the person simply has to pass the test, he does not have to worry about the grade that he gets above the passing mark.

The CHAIRMAN. What is the status of a person who takes a noncompetitive examination and does not pass ?

Mr. FLEMMING. Within a period of 6 months his services must be terminated by the department that nominated him.

The CHAIRMAN. Under the present law?

Mr. FLEMMING. Under this proposed bill. Under the present Executive order if he fails to pass a noncompetitive examination the head of the department may, within a period, I think it is 30 days, certify that he wants to keep that particular person in that job. The person can remain in that job alone and he does not get a civil service status, but under the proposed bill, as it has passed the House of Representatives, his services must be terminated within a period of 6 months.

The CHAIRMAN. Within a period of 6 months?
Mr. FLEMMING. That is correct.
The CHAIRMAN. Have you any other statement ?


Mr. FLEMMING. I do not have any further comment to make, Senator Bulow.

The CHAIRMAN. Are there any questions, Senator Mead?
Senator MEAD. No, Mr. Chairman.
The CHAIRMAN. Senator Hatch, did you want to be heard ?

Senator HATCH. No, Mr. Chairman. I just appear here this morning in order to hear the testimony from the witnesses who might be heard. I am very much interested in the present bill. I hope, of course, it will be reported out by the committee with certain amendments eliminated. My purpose here this morning was largely to gather information for myself.

It has just been called to my attention that I might make the suggestion that the present Civil Service law, prohibiting discrimination because of religion and politics, does not include race. Is that correct, Mr. Mitchell ?

Mr. MITCHELL. That is correct. It prohibits discrimination because of religion and politics.

Senator Hatch. Because of religion and politics?

Mr. MITCHELL. That is all. There is no mention of any other prohibited reason for discharge.

Does anybody want to ask any questions about classification? This bill provides for the extension of the compensation classification system. The classification system means regulation of the grades of pay, of course, you understand. The bill provides for giving the President the power to extend the classification system, which applies now only in the District of Columbia, to the field service.

Senator GEORGE. This bill does give the power to extend that?
Mr. MITCHELL. Yes; to extend that to the field.
Senator GEORGFJust as in the case of the District of Columbia ?
Mr. MITCHELL. Yes; just as in the case of the District of Columbia.
Senator GEORGE. The Commission is agreeable on that point?
Mr. MITCHELL. Yes; the Commission has recommended that.
Senator GEORGE. That is in your recommendation ?
Senator GEORGE. You think it should be there?

Mr. MITCHELL. I might say that the objections, Senator, that the committee probably would have to consider would be the matter of cost. It is going to cost some money to extend that. I just want to call that to your attention. We are very much for it and believe in it.

Senator GEORGE. Have you estimated the probable cost?
Mr. MITCHELL. Mr. Baruch, you have gone into that.
Mr. BARUCH. On the matter of cost, Mr. Mitchell ?



Mr. BARUCH. We have made an estimate of the ultimate, eventual cost of extending the classification act of 1923 to the field service based on figures collected 3 years ago, a little more than 3 years ago, as a matter of fact, January 31, 1937, which was a pay roll study with the help of the Bureau of the Budget, and we figured out at that time


that if all the positions which, under the power of the President to extend the classification act, could be included were actually included within that act—that might mean 10 or 15 years from now, of course—the estimated cost would be an increase in the annual pay roll of $14,000,000. Now, there are a couple of points we might bring out in connection with that.

The CHAIRMAN. In that connection, that estimate was made as of 3 years ago?

Mr. BARUCH. As of 3 years ago.
The CHAIRMAN. Is that higher now or lower?

Mr. BARUCH. May I take this up in order, Senator? I will come to that.


Mr. BARUCH. The first point is that this bill does not automatically extend the Classification Act to the field service, or to any other group of positions now excepted from that act. The President is authorize to extend the scope of the Classification Act to such groups of positions as have previously been surveyed by the Civil Service Commission, and reported on to the President with an estimate of cost. Then if the President deems it wise to extend the Classification Act to this group or that group or the other group of positions, he will have in front of him all the information, and he then can do so. Now, from a practical standpoint we know full well that this will be a gradual process and that group after group of positions in the field service, and others in Washington now excepted from the Classification Act, will be picked up under title II and the Classification Act extended to them gradually. So, even assuming that the total number of positions in the whole service is going to remain the same for a good many years, the cost of $14,000,000, if that is the figure, will be distributed over a large number of years and will not be a sudden increase in the annual Government pay roll on any particular date.

The second thing is, as you indicated, Senator, that these cost figures are based on a distribution of positions on January 31, 1937. Just the other day I noticed some figures that had been prepared by the Bureau of the Budget in connection with another matter which indicated that the number of positions on January 31, 1937, paid under Executive Order 6746, which has a lower pay schedule than the Classification Act, had decreased by, I do not remember the exact figure—something like 30,000. Well, now, the bulk of the cost, in fact $12,000,0000 of the $14,000,000, comes in that group of positions paid under the so-called Executive order schedule.

If in the last 3 years 30,000 or 40,000 positions have been transferred in the administrative discretion of the departments from the Executive order pay scales to the Classification Act pay scales—and that seems to be the case—it means the departments have absorbed that cost in the last 3 years, something like $4,000,000, let us say. So we can anticipate now, on the basis of the latest figures that are available, that the cost eventually will approach nearer $10,000.000 than $14,000,000. I think it will be less in the future than this figure which we gave to the committee would indicate.

The really important point is, though, that what we are doing here is establishing the machinery for applying to the field service a set of standard pay scales which have been approved by Congress


for the departmental service in the District of Columbia, and we are introducing into the field service particularly a system of centralized control over the allocation of positions to grades, which, in turn, determines the salary range applicable. That makes for uniformity and consistency in the same locality in the country, and in different localities.

At the present time, for example, there are about 160,000 positions in the field service allocated by the department to classified grades, each carrying a standard scale of pay. But for each group of positions in each of the 50 or 60 agencies that follow these pay scales under the Classification Act, each department head, meaning by that each group of subordinate officials-may act only for his own department without regard to the others. So in a given city like New York, or San Francisco, or Chicago, or any other community which has a large number of Government employees in different agencies, you will have persons doing exactly the same kind of work in department A and department B receiving different salary ranges merely because the administrative machinery ends at the head of each of the 50 or 60 agencies, and there is not any coordinated authority nor uniform set of standards applied by any central agency. That is a major difference, of course, between the situation in the field service, with respect to the 160,000 positions, and the situation in the District of Columbia to which the Classification Act and the jurisdiction of the Civil Service Commision apply, covering at the present time about 83,000 positions, or about half that number.

These positions I spoke of that were subject to Executive Order 6746 are in the so-called emergency agencies, or in the regular departments and paid from emergency funds. The Executive order, as amended, was set up by the President on June 21, 1934. It does not set up scales of pay comparable to the Classifications Act. It sets up grades of difficulty and responsibility of work comparable to those under the Classification Act but the salaries are different. Under the Executive order the maximum rate applicable to any given grade of employment is usually the corresponding minimum rate under the Classification Act. In other words, where you begin under the pay scale set by Congress in the District of Columbia, you end you use the pay scale of the Executive order.

In other words, taking a simple illustration, a stenographer enters the service here in the District of Columbia at $1,440. The range of pay applicable to that position runs, under the schedule set by Congress, to $1,800. However, in this group of positions paid under Executive Order 6746, the maximum that that stenographer could ever get would be $1,440, which is where the other girl began. Now, in order to get a range of pay, some new departments in the field service pay as little as $900 for stenographic employment in the same locality where some of the old-line departments following the pay scale of the Classification Act pay $1,440.

That is where the increased cost comes into the picture. It is in the Executive order group primarily. But, as I say, that group is gradually diminishing in number, according to the latest figures that we have been able to obtain, with the result that the total aggregate eventual cost is somewhat less than we advised the committee in the Commission's report.

up, if

Senator BYRD. I would like to ask, Mr. Chairman, in regard to these corporations. What is the status of the employees? Are they regarded as agencies of the Government?

Mr. BARUCH. Yes, most Government corporations are regarded as agencies of the Government, although nearly all of them are excluded from the Civil Service Act and the Classification Act also. the particular provision, I think, that is in the bill now, permitting the President to apply the Classification Act as nearly as practicable to these corporations is one that was designed, I think, so as not to conflict with existing charters or articles of incorporation of these corporations.

Senator BYRD. I notice near the top of page 4 it says, “consistently with the laws of any such State, Territory, or possession, or the District of Columbia." What exactly would that mean in regard to the fixing of salaries? Would there be any laws in the States in regard to that?

Mr. BARUCH. I have my own doubts about that. I think that was put in out of abundant caution, at least that is my guess, because it may be that the corporate laws in some States would be inconsistent with the idea that a central agency outside of a corporation could actually fix the individual items on its pay roll and thereby, of course, increase or decrease its costs.

Senator BYRD. The effect of this amendment would be to treat the employees of these 30 corporations the same as any other agency?

Nr. BARUCH. Yes; that is true. except it gives the President a little more discretion. He is authorized, according to this bill, to direct that such action will be taken as will permit the compensation to be fixed in accordance with the Classification Act, which gives him a discretion which might possibly permit him to introduce some new element with regard to corporations or some new basis of administration with regard to corporations that would not exist with respect to the regular Government agencies.

The CHAIRMAN. Are there any further questions?

Senator BYRD. Mr. Chairman, I would like to ask Mrs. McMillin a question. I think she was dealing with this question when I arrived. It is in regard to this apportionment proposition. It is, of course, true that the State from which the original appointment was made is charged with the appointment; but does that apply to the families of those who later obtain positions from the Government?

Mrs. McMILLIN. You mean in the matter of residence?
Senator BYRD. Yes.

Mr. VIPOND. If they maintain their residence where their parents are, a legal or voting residence, then they would be charged to the State from which the parents are appointed.

Senator BYRD. Suppose the parent becomes a resident, for example, of Virginia ; is the parent still credited to the original State?

Mrs. McMILLIN. The parent is credited to the original State.

Senator Byrd. Regardless of whether they are bona fide residents and voters?

Mrs. McMillin. If they were when they were appointed.

Senator BYRD. I am speaking about if they later become bona fide residents and voters. Suppose somebody, for example, from Minnesota was appointed from Minnesota and moved to Virginia and be

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