RAILROAD RETIREMENT

WEDNESDAY, MAY 19, 1937

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The committee met, pursuant to adjournment, at 10 a. m., Hon. Clarence F. Lea (chairman) presiding.

The CHAIRMAN. The committee will be in order. Mr. Fletcher, you may proceed.

Mr. FLETCHER. I think that Mr. Harrison has another word to add.

STATEMENT OF GEORGE H. HARRISON, PRESIDENT, BROTHERHOOD OF RAILWAY CLERKS, CINCINNATI, OHIO-Resumed

Mr. HARRISON. Mr. Chairman, I have two or three additional slight amendments that I would like to offer.

The CHAIRMAN. Very well.

Mr. HARRISON. And before doing so, I would like to make the statement that the amendments which I am about to offer represent an agreement between the Treasury Department, the railroads, and the reprsentatives of the railroad employees.

Mr. BULWINKLE. Mr. Harrison, have you extra copies of those amendments?

Mr. HARRISON. Yes. I am going to furnish for the benefit of each member of the committee a copy of the bill with all of the amendments inserted. The first I have to offer this morning is on page 2, section 1, line 9. Amend by inserting in the parentheses after the word "service", the following words: "Casual service or the casual operation of equipment or facilities."

At yesterday's session I offered an amendment on page 4 in the nature of a redrafting of section (c). Since that time we have made a further change in the redrafted section, and it will be noticed by referring to the revised amendment, by using the expression "within or without the United States" in place of the words "wherever the service is rendered."

And, on page 6, paragraph (h), last word in line 8, "wages" should be changed to read "remuneration." Page 9

Mr. BULWINKLE (interposing). Where was that?

Mr. HARRISON. Page 6, line 8, the word "wages" should be changed to "remuneration."

Mr. BULWINKLE. Just a minute, for my own information, at the bottom of page 4, and top of page 5 you struck out something.

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Mr. HARRISON. Yes, sir; I offered that amendment yesterday. On page 6, line 9, the word "wages" should be changed to "remuneration." I would like to now offer a further sentence to paragraph (h) on page 6 of the bill. I will have to furnish that to the committee. Mr. BULWINKLE. Is it very long?

Mr. HARRISON. No; just a short one.

Mr. BULWINKLE. Read it so I can write it.

Mr. HARRISON (reading):

The term does not include tips, or the voluntary payment by an employer, without deduction from the remuneration of the employee, of any tax now or hereafter imposed with respect to the compensation of such employee.

That amendment has been agreed to at the request of the Treasury Department.

The amendments that I offered yesterday will be found in the copy of the bill which I have filed with the members of the committee. That represents all of the amendments I have to offer.

The CHAIRMAN. Very well. Mr. Fletcher, you may proceed.

STATEMENT OF R. V. FLETCHER, GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C.

Mr. FLETCHER. Mr. Chairman and gentlemen of the committee, my name is R. V. Fletcher, and I am with the Association of American Railroads.

I am spared the task of making an extended statement by reason of the very full analysis of the bill which has been presented to the committee by Mr. Harrison, who spoke, insofar as an explanation of the bill is concerned, not only for the group which he immediately represents but for railroad management as well.

I think the committee understands that the terms of this bill and the amendments which have been suggested represent an agreement between men and management, and therefore it is not necessary, unless some special point abides in the mind of some member of the committee, for me to go through this bill in anything like a meticulous way for the purpose of explaining its terms.

I rise, therefore, mainly for the purpose of asserting what has been said by Mr. Harrison as to the complete agreement between the parties with reference to this measure, and largely to emphasize and reiterate what he said in that respect.

This represents an agreement, the underlying principle of which is that these retirement allowances shall be paid by the industry, one-half by the men and one-half by the management.

It is possibly a more accurate statement to say that the entire burden falls upon the industry, because I doubt very much if anybody can draw any logical distinction between men and management. So far as that is concerned, all of us, whether we sit on one side of the table or on the other side of the table, are equally interested in this matter, and our welfare, of course, is involved in the welfare of the industry.

In this particular plan the Government stands in the attitude of a stakeholder, or possibly it is more accurate to say it stands in the attitude of a policing authority in order to see that this understanding is carried out in accordance with its terms and without any possible injustice to anybody.

When we began the protracted negotiations which led happily to this agreement, it was the thought of the people whom I represent, the railroad companies, that there should be some way to work it out without appealing to the Congress for legislation, through the medium of a contract between the railroads and their employees, as other difficulties have been solved.

So

I think it would not be inappropriate to call attention to the fact that something like a year ago there was before this committee a bill, which came to be known as the Wheeler-Crosser bill, to take care of the welfare of employees who had lost their positions by reason of coordinations of terminal facilities and matters which could be handled in common with several railroads, and ultimately that matter was worked out by an agreement which relieved the Congress of the necessity of passing upon the question involved in that proposed legislation. And many other problems have arisen since then which have been solved by men and management through the medium of negotiation which made it unnecessary to appeal to Congress or to the Interstate Commerce Commerce or to the courts for relief. that was the idea that our group had, that this might be worked out in that way; but as we went on with these discussions and these negotiations, it became apparent that in this particular matter here were so many complications involved that it would be impossible to do this job through the medium of private agreements or contracts. Some of those will readily occur, I think, to the members of the committee. In the first place, it was proposed to make this applicable to all of the railroads of the country, and it was difficult to find any group of men who represent all of the railroads of the country, large and small; in the second place, it was essential to the proper working out of this plan that all railroad service should be counted, whether working for one railroad company or for another; that there might be, to borrow a phrase which is known in real-estate law, a tacking of the service with one railroad to another, in order to determine the amount of benefits, and that presented difficulties which might be insuperable except through the medium of legislation.

Then there was the third and perhaps the most important consideration, the necessity for some governmental body which would be impartial to solve all of the various questions that might arise as to the proper interpretation of this contract, if it were a contract, so that both parties would have confidence in the decisions which might be made upon numerous questions that necessarily arise; questions of fact and questions of interpretation of the agreement.

And it became obvious that there would have to be some impartial tribunal, which is embodied in this bill in the form of a railroad retirement board, which would decide the questions whether a particular individual was entitled to a retirement allowance; and if so, how much under the circumstances that might arise.

Finally all parties came to the conclusion that the only way by which this agreement could be made effective was through the medium of having it supervised and policed, so to speak, by the Government of the United States, and that is the reason why it is necessary to come to Congress for the enactment of the legislation.

I mention that because it seemed to me it puts this particular situation in a somewhat different attitude from ordinary legislation.

And that ought, if I may be pardoned for saying so, to reconcile the members of the committee to adopting some of the provisions of this law which might strike them as not being entirely in accord with what otherwise they might consider to be proper public policy. Take, for instance, the question raised by Mr. Mapes on yesterday with reference to the status of the employees of the Railroad Retirement Board and their being under the civil service.

I can readily understand how it might appear to be quite illogical, not to say incongruous, for the act to provide that the employees of this Railroad Retirement Board should not be subject to all of the provisions of the civil-service laws, and yet when you remember that this board is set up through the consent of the Government for the purpose of settling controversies that are essentially private controversies, if I may use that expression, I would not think it would be such a shock to the Members of Congress if they were allowed to say how those men should be chosen and from what particular ranks they should be drawn.

I submit that for your consideration, Mr. Mapes.

Mr. MAPES. I am very much in sympathy with this legislation, and I want to see a satisfactory bill enacted into law; but I think the interests of the Government ought to be given due consideration as well as those directly interested in this legislation, and I am wondering if they hope to use the Government without giving due consideration to the interests or rights of the Government.

Mr. FLETCHER. Well, I hope not, Mr. Mapes. I have not consciously assumed such position.

Mr. MAPES. Take this civil-service provision. That is a pretty important provision, and those of us who have advocated civil service in the Government for years will find it difficult to vote for it, and the students of civil service generally are going to be a little shocked at that provision.

Mr. FLETCHER. May I say this also: That my understanding is that the Reconstruction Finance Corporation Act exempts the employees of that particular activity of the Government from the civil-service rules, so that their employees, lawyers, accountants, and so on, are not subject to the civil service, and I imagine that could be justified on the ground that it was set up for a special purpose and did not represent what might usually be called an ordinary or normal governmental activity; and I have the impression, too, if I may venture to say so, that the history of the administration of the Reconstruction Finance Corporation justifies the wisdom of their being exempted from the terms of the civil-service law; that is, the men who are engaged in the highly specialized work of that particular department. Mr. MAPES. Since yesterday my attention has been called to the fact that there was a civil-service examination of the employees of the present Retirement Board last December.

Mr. FLETCHER. Yes.

Mr. MAPES. And that a great many of them are now within the classified service. The statement has been made to me, however, that there are men still in the organization who did not take the examination, while others who took it have been let out.

Mr. FLETCHER. Well, I would not for the moment suggest; I would not have the temerity or the inclination to suggest that the civil-service law generally applied to Government activities is not very fine; but

where the Government is called upon to do some kind of special work, such as that of the R. F. C. work or work that would be under this bill, I seriously doubt whether the public interest would be furthered by the application of the civil-service rules.

Mr. BULWINKLE. Mr. Mapes, will you let me interrupt there?
Mr. MAPES. Yes.

Mr. BULWINKLE. Judge Fletcher, with reference to the question Mr. Mapes asked you, the Tennessee Valley Authority has a provision in their regulations to the effect that they will not permit political influence or endorsement for anyone. How about a provision like that?

Mr. FLETCHER. I have not consulted my friends on the other side about it, but I imagine we would have no objection at all to a provision of that sort in the act. Mr. Harrison nods his assent. Mr. HARRISON. It is all right with us.

Mr. BULWINKLE. I am not speaking of the provision with regard to Members of Congress; I am very much interested in the success of this bill and its working out after it is enacted into law-if you leave it this way, then it might be said that it was subject to political influence.

This other way you could, by a short provision, stop any criticism that might arise in any way.

Mr. FLETCHER. Yes; if you think, Major Bulwinkle, that the putting of the words in the law will prevent political influence I would be enthusiastic for it.

Mr. BULWINKLE. I am told that the Tennessee Valley Authority has a rule to the effect that if any person gives a political endorsement, that the application that has that political endorsement is turned down immediately.

Mr. FLETCHER. Well, if he could show that he solicited political endorsement.

Mr. BULWINKLE. It does not make any difference whether he solicits it or not.

Mr. FLETCHER. That would be pretty hard on the fellow if some friend wrote down there and the applicant did not know anything

about it.

Seriously, I think that the suggestion that you make, Major Bulwinkle, would be an excellent one.

Mr. BULWINKLE. It would relieve the Board of considerable embarrassment, regardless of the party in power.

Mr. MAPES. There is one clause here that I just noticed in glancing through the bill this morning. I assume that you are taking no chance on reorganization of the executive departments of the Government, of having this Board put under the control of a Cabinet officer, because you say on page 18, section 10:

There is hereby established as an independent agency in the executive branch of the Government a Railroad Retirement Board.

Mr. FLETCHER. Well, that language just follows somewhat similar language in many of the statutes that create commissions or boards, like the Interstate Commerce Commission, for example, and it was written in the bill, following the statutes, and the law, as it stands now, without regard to what the Congress might do about reorganization.