have a reduction in pay if this pay bill is enacted without change. We earnestly recommend that Congress, without delay, narrow the gap between military pay and the pay received by others of similar ability by passing this bill.

Mr. Chairman, and members of the committee, the above remarks conclude my statement on this proposed legislation and I am ready to answer any question that you may have.

Senator CANNON. Thank you, Admiral Knudsen, for your statement. Do you believe that, generally, the provisions of the bill are sufficient to accomplish the intent and purpose?

Admiral KNUDSEN. Yes, sir; I think it is a step in the right direction, and does close the gap between the pay of industry and the pay of the civil service.

Senator CANNON. You have referred to the rations provision here and subsistence. Do you agree with the position of the Department of Defense on the recommendation that no change be made in the subsistence rates at this time?

Admiral KNUDSEN. Mr. Chairman, I just learned of the study that was being carried on over in DOD yesterday from Mr. Paul's statement. In view of the fact that there is a study going on, as far as subsistence is concerned, the Coast Guard would be willing to go along with the Department of Defense in the recommendation that no increase in subsistence be made at this time.

However, in the event that the Congress does not see fit to go along with the recommendation of DOD, we would like a change included in here which I have read from my statement.

Senator CANNON. As I understand it, the changes recommended by you, these would not be inconsistent with the Department's position in any event, would they?

Admiral KNUDSEN. No, sir; that is correct.

Senator CANNON. So that this change could be made although there may be no necessity for it; if no change is made in subsistence, but at least it would not be inconsistent with the Department's position? Amiral KNUDSEN. That is correct, sir.

Senator CANNON. Now, what are your views on the personnel with 2 years or less?

Admiral KNUDSEN. The Coast Guard would endorse and support the recommendation of DOD relative to the pay of both enlisted and officers with 2 years and less.

However, I would like to point out that the pay of our cadets at the U.S. Coast Guard Academy is geared to 50 percent of the pay of the O-1. As was brought out yesterday, we are having the same trouble as are the other academies in that most of our young cadets are graduating in debt, and we certainly hope and urge that the committee can, in some way, correct this situation.

Senator CANNON. Now, were you here at the hearings yesterday? Admiral KNUDSEN. Yes, sir; I was.

Senator CANNON. You heard the Department present their views. and position then on the sea- and foreign-duty pay and the separation allowance recommendation that a person be eligible for one but not both.

What are your views on that position, Admiral?

Admiral KNUDSEN. Our views on that are that we support the Navy rather than DOD. We feel that sea and foreign pay and family separation allowance are two distinct and separate things, and that our enlisted men should be eligible for both.

Senator CANNON. And I presume that you support the recomputation provision as recommended, as is now in the House bill? Admiral KNUDSEN. Yes, sir; we do.

Senator CANNON. What about the retroactive provision with relation to the January 1, 1963?

Admiral KNUDSEN. No, sir; we support the DOD position.

Senator CANNON. You feel there should be no retroactive position. Admiral KNUDSEN. There should be no retroactive feature.

Senator CANNON. So far as the bill is concerned. And do you clearly understand that if the recomputation provision is passed by the Congress this year as proposed in this bill, that that would be the end to recomputation, and that there would be no further question about it?

Admiral KNUDSEN. I understand that very clearly, sir.

Senator CANNON. And you support that position?

Admiral KNUDSEN. Yes, sir.

Senator CANNON. Senator Saltonstall.

Senator SALTONSTALL. I think I only have one question, Mr. Chair

man.

You make a suggestion with relation to enlisted men when rations in kind are not available, and you wish the clause that the House put in, which tries to tighten this availability up a little, stricken out. But certainly, if it isn't stricken out, that isn't fundamental to your ideas on the bill?

Admiral KNUDSEN. No, sir; that is correct. You see, what our enlisted men are afraid of, Senator, are the words "substantially in excess."

Right now, as you know, they receive $77.10. They are afraid of the interpretation that would be placed on "substantially in excess." Is it $1, $2, twice as much? They are afraid they would then revert to clause 3, which would give them $37.50 a month, thereby losing $39.60.

Senator SALTONSTALL. What I ask you is that isn't so fundamental to the bill that you believe that that amendment should be made or else you are not in favor of the bill?

Admiral KNUDSEN. Oh, no, sir.

Senator SALTONSTALL. But you simply suggest that as an improvement from the Coast Guard point of view?

Admiral KNUDSEN. That is correct, sir.

Senator SALTONSTALL. Thank you, Mr. Chairman.

Senator CANNON. Senator Engle.

Senator ENGLE. I think Senator Saltonstall asked the only question that I would ask, Admiral.

Thank you very much.

Senator CANNON. Senator Beall.

Senator BEALL. I have no questions.

Senator CANNON. Senator Young.

Senator YOUNG. Thank you, Mr. Chairman. I have no questions, Admiral.

Senator CANNON. Thank you very much, Admiral. We appreciate your being here and presenting your views.

Has Congressman Cleveland arrived yet? Then we will proceed with Dr. Terry, Surgeon General, Public Health Service.

Dr. Terry, we are very happy to welcome you here to the subcommittee and to receive your testimony in connection with the pending bill. You may proceed as you see fit.

STATEMENT OF DR. LUTHER L. TERRY, SURGEON GENERAL, PUBLIC HEALTH SERVICE; ACCOMPANIED BY DR. MURRAY DIAMOND, CHIEF, OFFICE OF PERSONNEL, PUBLIC HEALTH SERVICE

Dr. TERRY. Thank you, sir.

Mr. Chairman and members of the committee, I am Dr. Luther L. Terry, Surgeon General of the Public Health Service. I appreciate the opportunity to testify before this committee on H.R. 5555.

Before proceeding with my prepared statement, Mr. Chairman, I would like to introduce Dr. Murray Diamond, who is Chief of our Office of Personnel in the Public Health Service, and who accompanies

me.

Senator CANNON. Doctor, we are happy to have you here also with Dr. Terry.

Dr. DIAMOND. Thank you, sir.

Dr. TERRY. I have a very brief satement outlining the position of the Public Health Service. The Public Health Service is old in tradition and prestige. It was established by an act of Congress in 1798 as the U.S. Marine Hospital Service. From that date it has been dedicated to protecting the health of the Nation.

In 1873, a career system was established by regulation of the Treasury Department-patterned upon the commissioned officer system of the U.S. Army. In 1889, Congress recognized-and expanded-this system.

Over the years, the commissioned corps personnel system of the Public Health Service has become more and more comparable to those personnel systems used by the military services. Today, many of the statutes relating to benefits and pay for the military services include the commissioned corps of the Public Health Service as one of the seven uniformed services of the United States.

We have found that this system has worked well and has made it possible for the Service to perform its functions at a high level of competence. Since World War II, we have been increasingly beset with problems of recruitment and retention of our commissioned personnel.

In a world which is relying more and more on the competencies of scientific personnel with highly specialized technological training, we find that we are competing for persons who are in great demand and short supply. Unless we can meet this competition with an adequate level of compensation and benefits, our ability to recruit and retain competent commissioned personnel will continue to deteriorate. The plain fact is that in recent years the compensation of members of the uniformed services has not kept pace with increases in compensation

for comparable groups in the economy generally and on the civilian side of the Government. As the head of an agency employing large numbers of scientific personnel under the civil service system as well as in our commissioned corps, I appreciate how important the upward adjustment along the lines of that contemplated by the present legislation.

Although the pay levels for pay grades O-2, 0-3, and O-4, if increased as recommended by the Department of Defense, appear to be reasonable, and pay levels for pay grade O-5 and above, lieutenant colonels and above are, in my opinion, not adequate to meet competition and to retain senior scientific and professional personnel. With the elimination of any increase in the subsistence allowance, as recommended by the Department of Defense, the pay levels for these grades would be approximately $29 a month less than originally recommended by that Department.

In conclusion, H.R. 5555 represents the only basic pay increase proposal for the uniformed services to be considered by the Congress since 1958. Clearly, pay adjustments are vitally needed. Therefore, I urge enactment of the bill. I sincerely hope, however, that the continuing review of compensation for members of the uniformed services which Assistant Secretary Paul mentioned in his testimony will result in future adjustments of compensation in line with changes in salaries and wages elsewhere in the economy.

Mr. Chairman, this completes my prepared statement. I shall be happy to answer any questions.

Senator CANNON. Thank you, Doctor, for your testimony. What is your breakdown of personnel that would be involved under this bill?

Dr. TERRY. As of June 30, 1963, Mr. Chairman, we had on duty 4,766 commissioned officers in the Public Health Service.

Senator CANNON. 4,766?

Dr. TERRY. That is right, sir.

Senator CANNON. How many of these are in the scientific and professional category that you referred to on page 2 of your statement? Dr. TERRY. Approximately three-fourths.

Senator CANNON. And just give us a rough breakdown of the various categories.

Dr. TERRY. Yes, sir.

Senator CANNON. You have so many doctors?

Dr. TERRY. Yes, sir, I can give you a detailed breakdown for the record, and if I may, I will just give you a brief summary of the larger elements of our commissioned corps.

Of the total of 4,766 on June 30, there were 2,319 physicians, roughly half. There were 425 dentists. There were 641 sanitary engineers, and there were 228 persons in the scientist category.

As I say, I can submit to you the others, including the pharmacists, nurse officers, dieticians, and so forth, but these are the principal categories of the Service.

Senator CANNON. Very well. If you will submit that for the record then, and we will take it into consideration.

Now, the physicians that you have now, do they then get the same increased pay provisions that the physicians on active duty with the military service get today?

Dr. TERRY. That is right, sir.

Senator CANNON. Which is what amount? What do they get by way of increase in pay?

Dr. TERRY. What would they get as a result of this bill?

Senator CANNON. What do they get under present law? What is the added pay?

Dr. TERRY. The added pay? I beg your pardon, I didn't understand that. The incentive pay?

Senator CANNON. Yes.

Dr. TERRY. The incentive pay increments extend up to a maximum of $250 for physicians and dentists after 10 years of service, actual service.

Senator ENGLE. Would you yield, Mr. Chairman?

Senator CANNON. Yes.

Senator ENGLE. What I want to find out is what a fellow takes home. That is what counts.

Dr. TERRY. I beg your pardon, sir.

Senator ENGLE. I want to find out what he takes home. That is what counts, and that is what his wife looks at.

Dr. TERRY. Yes, sir, it certainly is very important in terms of paying the bills.

Senator ENGLE. It sure is. Just tell me what take-home pay is for your doctors and dentists.

Dr. TERRY. All right, sir. I can give you ranges if I may.

Let me take, for instance, the ranges in the principal categories about which we are most concerned. This is the O-5 or the lieutenant colonel level. At the present time, the range there is from $8,380 to $12,057.

Senator ENGLE. For what, medical doctors?

Dr. TERRY. For medical doctors and dentists in that category.
Senator ENGLE. $12,000 what?

Dr. TERRY. From $8,380 to $12,057. That is in the lieutenant -colonel grade.

Senator ENGLE. How much service would that ordinarily require? Dr. TERRY. Ordinarily a person would arrive at that category on -a permanent basis, 17 years.

Senator ENGLE. I made the statement yesterday that any doctor who couldn't earn a thousand dollars net a month ought to get out of business, and I don't see how you keep competent doctors at this level. If I was in military service or in the Public Health Service, I would quit if I could get enough money to just set up a shop.

Dr. TERRY. This isn't any problem for a physician to get money to set up shop. It's a good business investment and any physician who wants to go in practice can get adequate financing from banks or other organizations without any problem. So this is not the thing that keeps out people.

Senator ENGLE, What is the incentive that keeps these people in, or do you have the dregs of the profession who can't go out or don't want to go out and compete and make more money?

Dr. TERRY. Senator Engle, we certainly do not have the dregs. The thing that I am apprehensive about today is that if the present pay inequities continue, we will be getting to a corps and a professional group consisting of persons of mediocrity.