At the 4 post offices visited in the Dallas region, which are responsible for 7 of the 28 heavy-duty routes in the region, we found that there were unnecessary delays in adjusting heavy-duty compensation on 4 heavy-duty routes. At one of the post offices, we noted that the evaluation of three heavy-duty routes during the May 1960 inspection week indicated that the heavy-duty compensation required adjustment. However, we believe that the need for an evaluation of these routes should have been apparent at least 5 months earlier if the postmaster had reviewed the carrier trip reports. Moreover, even though the May 1960 evaluation indicated that the heavy-duty compensation for the three routes required adjustment, no such action was taken. At another post office, we noted that a carrier continued to receive heavy-duty compensation even though the May 1959 and 1960 route evaluations indicated that the carrier was not entitled to heavy-duty compensation. After we had discussed the matter with post office and regional officials, the heavy-duty compensation payments to two carriers were decreased by a total of $912 a year and payments to two other carriers were increased by a total of $875 a year.

At 5 of the post offices visited in the Cincinnati region, which are responsible for 20 of the 244 heavy-duty routes in the region, we found that 4 postmasters had not performed adequate reviews of the carrier trip reports and therefore unnecessary delays occurred in adjusting heavy-duty allowances on 6 routes and in providing relief for 2 overburdened routes. For example, we noted that on 1 route heavy-duty allowances were continued even though the route was reduced from 41 miles to 37 miles in length, and the number of possible stops was reduced from 670 to 494. Our review of carrier trip reports for the period January through June 1960, disclosed that the carrier averaged 38 hours a week to serve the route. However, the carrier was paid heavy-duty compensation, based on a 43-hour week, of $356 a year and additional equipment maintenance allowance of $608 a year. The postmaster had evaluated the route during the May 1960 inspection week, and the heavy-duty allowance and the additional equipment maintenance allowance were discontinued in July 1960. Another example concerns a carrier who averaged 36 hours a week to serve his route during fiscal year 1960 and was not entitled to extra compensation. However, he was paid heavy-duty compensation of $132 a year, based on a 40-hour week, and additional equipment maintenance allowance of $577 a year. At the Cincinnati region, we found also that rural carriers at two post offices were not properly preparing their daily trip reports. Consequently, the trip reports were of doubtful value for use in determining whether the routes needed an evaluation.

Errors in determining amounts payable to carriers for additional equipment maintenance allowances on heavy-duty routes.-Our review of heavy-duty routes in two of the postal regions visited by us disclosed cases where postmasters made inaccurate computations of equipment maintenance allowances, made inaccurate counts of the number of potential stops in determining equipment maintenance allowances, or did not take action to adjust the equipment maintenance allowance when the annual inspection showed that adjustment was needed. As a result, there were numerous errors in determining the amounts of equipment maintenance allowances payable to the carriers on certain heavy-duty routes. Although the amounts were relatively small, we believe that it is another indication of the need for more adequate administration of heavy-duty rural routes.

Equipment maintenance allowance for heavy-duty routes is paid to carriers on the basis of route length and number of potential stops on the route. The number of potential stops is the actual count of the number of times a rural carrier must move his vehicle to serve all boxes on the route; where a group of boxes can be served without moving the vehicle, the stop is required to be counted as one (Postal Manual, sec. 755.41). The postmaster, or his designee, is required to verify annually the length of the route and the manner of potential stops during the May route inspection; required changes in equipment allowances are to be reported to the region.

For 10 of the 18 heavy-duty routes reviewed in the Wichita region, we found that, to comply with Department instructions, equipment maintenance allowance payments to the carriers on these routes needed adjustment for a net decrease of about $300 a year. Our review showed that, for six of the routes, the allowances were incorrectly computed and, for four of the six heavy-duty routes on which we counted the potential stops, the stops as counted by the postmasters ranged from 15 to 23 percent more than the stops as counted by us. We noted also that for one route the postmaster did not adjust the allowance even though the annual verification of stops indicated an adjustment

was necessary.

At the time of our review corrective action had been taken on one of the cases. Wichita regional officials advised us that they should provide additional guidance to postmasters concerning equipment maintenance allowances on heavy-duty routes.

At two of the six post offices visited in the Seattle region, we noted that there were inaccurate determinations of the number of potential stops on three heavyduty routes. At one post office we noted that traffic intersections and stop signs along the route were counted as potential stops. At the other post office, the postmaster did not adjust the additional equipment allowance even though the annual inspection of stops indicated that an adjustment was necessary. We were advised by regional and post office officials that correction action would be taken.

We believe that the extent of the deficient conditions noted in our review points up a need for more effective regional administration of certain aspects of rural delivery service.

Recommendation to the Department.-We recommend that to expedite the authorization or adjustment of allowances to carriers serving heavy-duty routes, and to provide prompt relief on overburdened routes, the Postmaster General have the regional directors take action so that adequate periodic reviews of rural carrier trip reports and determinations of the number of potential stops are made and that adjustments of compensation are made promptly.

The Deputy Postmaster General informed us that the Department had revised the forms and instructions for the evaluation of rural routes for clarification and to make the instructions more explicit. He informed us also that the Department was preparing amendments to the Postal Manual to emphasize (1) the importance of taking prompt action to provide relief on overburdened routes and (2) the postmasters' responsibility for initiating such action. He informed us further that the postmasters have been given specific instructions regarding the evaluation and count of stops on all heavily patronized routes and the submission of reports to the regional office. Furthermore, he informed us that postmasters had been instructed to examine trip reports for all other routes to determine whether there is an indication that relief is needed or whether a heavyduty allowance should be authorized. Also, the Deputy Postmaster General advised us that the Department would initiate a study to review existing procedures governing operation of the rural delivery service and to develop a program which would require prompt, positive action by postmasters and provide for followup by regional officials to assure effective administration of all activities relating to the rural delivery service.

SCOPE OF REVIEW

Our review of selected rural delivery service activities of the Post Office Department included examination into pertinent legislation, policies and procedures, and operations of these activities. We examined, on a test basis, such records, reports, and other data as we deemed appropriate for the purposes of our review. The review was directed primarily to the identification of matters which appeared to warrant attention.

The review was conducted at Department headquarters, Washington, D.C.; at four regional offices located in Cincinnati, Dallas, Portland (now at Seattle), and Wichita; and at 33 post offices located in these regions.

Our field work was completed in October 1960, and our work at the Department's Washington office was substantially completed in March 1961.

Mr. MORRISON. We thank both of you gentlemen for your excellent presentations.

Since we have a vote coming up immediately after the House goes into session and there is very little time left, we shall not have time for questions. Therefore, we will ask you gentlemen if you would consider returning at a time when it is convenient for you, so that members of the committee may ask any questions that they desire.

The committee will stand adjourned until tomorrow morning, May 10, at 10 a.m., when the committee will receive the testimony of Mr. Roswell Gilpatrick, Deputy Secretary of Defense, and Mr. Halaby, Administrator of the Federal Aviation Agency.

(Whereupon, at 11:53 a.m., the committee adjourned, to reconvene at 10 a.m., Thursday, May 10, 1962.)

REVISION OF MAJOR FEDERAL STATUTORY SALARY

SYSTEMS

THURSDAY, MAY 10, 1962

HOUSE OF REPRESENTATIVES,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The committee met, pursuant to notice, at 10 a.m., in room 215, House Office Building, Washington, D.C., Hon. James H. Morrison (acting chairman) presiding.

Mr. MORRISON. The committee will come to order, please.

Today we shall resume hearings on legislation pending before the House Post Office and Civil Service Committee to provide pay increases for postal and other Federal employees.

This morning it is our pleasure to hear from two more distinguished officials of the executive branch of our Government, the Deputy Secretary of Defense, Hon. Roswell Gilpatric, and Hon. Najeeb Halaby, Administrator of the Federal Aviation Agency.

We shall first hear from the Deputy Secretary of Defense, and I want to mention at this time that Secretary Gilpatric must leave the city by noon and in order for him to catch his plane he will have to excuse the Secretary at approximately 11 o'clock.

So, Mr. Secretary, will you proceed?

STATEMENT OF HON. ROSWELL L. GILPATRIC, DEPUTY SECRETARY OF DEFENSE

Mr. GILPATRIC. Thank you, Mr. Chairman.

May I introduce to the committee my associates, Dr. Harold Brown, the Director of Defense Research and Engineering, on my right, and on my left, Mr. Thomas Morris, the Assistant Secretary of Defense for Installations and Logistics. Mr. Morris and Dr. Brown will be available for questioning if there is time. They have statements which they would like at least to put in the record because they have more to do with the problem before the committee today than anv other officials in our Department.

Mr. GROSS. Mr. Chairman, one question before the gentleman starts. It is a rather substantial statement in length. Mr. Gilpatric, if you read your entire statement there will be no opportunity to ask any questions if you are leaving shortly after 11 o'clock.

Mr. MORRISON. We have two witnesses to hear from today. I am sure after Secretary Gilpatric submits his statement and I will leave it up to him as to how much he wishes to cover of his statement, and we hear from Mr. Halaby, if you do not have an opportunity to have

your questions answered by their assistants, if you wish we will request that the Secretary come back for questioning.

Will you proceed, Mr. Secretary?

Mr. GILPATRIC. Mr. Chairman and members of the committee, I appreciate the opportunity to appear before you today in support of the President's proposal for the reform of the Federal pay system. I consider this a particularly important appearance because it gives me a chance to emphasize an obvious truth which is nevertheless too often forgotten: no matter how powerful our weapons, how brilliantly conceived our strategy and tactics, the defense effort depends ultimately on people-people in adequate numbers and, most importantly, people of ability, experience, and judgment.

As Under Secretary of the Air Force a decade ago, and now as Deputy Secretary of Defense, I have been personally exposed to the Defense Department's problems in getting and keeping people of the quality we require to fulfill our mission. As the managing partner for some years in a large law firm engaged in corporate practice, I know from personal experience how intensely the business community, as well as the legal profession, competes for talent. The plain truth is that, in terms of pay incentives and flexibility of personnel policy, the Federal Government is no longer in the same ball park with industry and the professions.

This would be a bad situation if the question were only the efficient use of the taxpayer's dollar. It is a dangerous situation when our national survival is involved. We are in a deadly competition with an enemy who has made substantial and sometimes spectacular progress in the military field. In large part this progress results from the fact that the Soviets channel their best manpower into their military effort. This is done partly by the stick and partly by the carrot-that is, partly by government fiat and partly by a system of monetary and other rewards which lead the most talented Soviet citizens to aspire to such jobs. We in this country, who believe in freedom of choice, will not take up the stick. But we certainly should not and, indeed, cannot afford to turn Federal service into a secondclass profession by failing to pay our people what they are worth.

As you well know, Defense is by far the largest single employer in the Government and, indeed, in the United States and the free world. Of its approximately 3,900,000 employees, about 1,060,000 are civilians, a number nearly double the total personnel of General Motors Corp. These employees represent about 45 percent of the full-time civilian workers of the Federal Government. They are divided into two major segments: 544,000 trades and crafts employees, and 516,000 salaried personnel.

As you know, the proposed legislation is not concerned with trades and crafts employees. The pay of these workers is set by wage boards based on wage rates for similar jobs in the pertinent locality. Thus, the principle of reasonable comparability with prevailing remuneration in the private sector of the economy is already in force as far as these workers are concerned.

This is not true, however, with respect to salaried personnel of the Department, almost all of whom fall under the Classification Act, all except about 500 or 600 under Public Law 13. While these civilians are specialists in skills found throughout our economy, both our ex