I think, as we point out here, it ought to be studied every year so Congress will know what the position is and we can adjust accordingly.

Mrs. NORRELL. What ratio of difference there could we use to attract and to keep our scientists and to keep people in Government? What ratio between the Government salary and industry?

Mr. FOLSOM. With regard to the top positions, I do not think you can get within reach of that. But in the middle grades, I would say within 10 percent.

Mrs. NORRELL. Thank you.

Mr. DULSKI. Mr. Barry.

Mr. BARRY. Thank you, Mr. Chairman.

I am sorry I was not at Hamilton College when you gave an address during the 150th anniversary convocation, not so long ago. I did, however, appear the day after you spoke so eloquently.

In 1960 in the final year of the Eisenhower administration there was a study made on the entire rate structure of Federal employees. Does this bill we now have before us embody generally the conclusions reached from that study?

Mr. FOLSOM. Yes, I think so; the principles are the same.

Mr. BARRY. So, in effect, this is a bipartisan approach to the Federal pay rate structure?

Mr. FOLSOM. Yes, if you look up the recommendation the previous administration made you will find they are somewhat similar on this. At that time we did not have the Bureau of Labor Statistics facts to go on. We had a general impression with samples here and there, but now you have the facts to prove what we are stating.

Mr. BARRY. And the veto that President Eisenhower gave to the first bill that was in, on the general increase, was in the hope that the study that has now been made the results of which we now have before us in the form of this bill could be put to the Congress prior to muddying up the water further by a general increase; is that

correct?

Mr. FOLSOM. I think so.

Mr. BARRY. And that does sustain to a large extent the position of the minority in Congress which was the Republican Party at that time?

Mr. FOLSOM. Yes.

Mr. BARRY. I am very happy that you have come here to give us this clear exposition of exactly the status of the way things were in the Eisenhower administration and during the transition.

I would like to ask, following Mrs. Norrell's question to you, this question: If the Federal structure in the higher grades-let's say from 11 on up-took the general corporate average, which is now, you say-they are 15 percent above, in grade 11, running as high as 32 percent in grade 15-if you took the average-realizing, of course, that many corporations are paying much more than that, especially in the up-and-coming industries which are really on the move and expanding-if we took that average, do you think that would be a fair rate and when I say "fair," I don't mean "fair and equitable" so much as I mean fair to the people insofar as being able to get the finest help at the lowest ultimate cost to the taxpayer.

Mr. FOLSOM. That is the objective of this plan. You must remember we are talking here about averages, too. We will still not be

competing with the more progressive companies probably. I think under those conditions you can probably get the talent you need.

Mr. BARRY. You feel there are other incentives in Government, such as the desire to serve?

Mr. FOLSOM. Yes, of course.

In the lower grades we do pay com

parable salaries in order to get the people.

Mr. BARRY. In the Internal Revenue Service we have been losing a great many people who became tax experts to such companies as yours.

Mr. FOLSOM. You will always have that. There will be a number of people who will want to come down for short service for training and then go out and get better jobs in industry. You have to expect that. You get good service from those people while they are here, but they are not building up the organization.

Mr. BARRY. It is a fact industry today is getting so automated as far as collection and collation of information and data is concerned that we need lesser numbers of people to do that kind of, shall we say, low-paid work, and more people of higher intelligence to interpret the facts as they are read off from our mechanical system; is that not true?

Mr. FOLSOM. That is true.

Mr. BARRY. Our aid program has not been working as well as it should our foreign aid program. That is a bone of contention to the gentleman from Iowa. We were on a grant basis in Marshall plan years, and we are now almost totally on a loan basis. We are making very few grants. This takes an entirely different type of personnel and less numbers of personnel, more the banker type who sits back and makes judgment on the opportunity of repayment of loans. You would have to look way into the future and examine many conditions that could exist.

They have asked in the AID Agency for an upgrading of their personnel, especially in grades 11 and on up. They have also indicated they could cut down on numbers.

As discussions continue with the AID Agency with respect to this change in type of personnel they require at the top, I have been consistently hammering at them-will this represent a saving to the Government? They have been assuring me it would. providing they could find a way to get rid of some of the people in the AID Agency they do not need. They are experiencing great difficulty under our civil service rules in the attrition needed to really bring this Agency up to a quality level and at the same time reduce the quantity of personnel.

Do you envision anything that could help an agency of Government to upgrade itself and at the same time do the unpopular thing of seeing to it that personnel is reduced in numbers.

Mr. FOLSOM. I do think they have been moving in the right direction when they get a different-type person to head up these projects in the different countries. With good management there is no reason why vou could not reduce the number of people down the line that are doing the work. That is true in industry, and I do not know why it would not be true in the foreign aid program.

Mr. BARRY. Civil service rules provide safeguards for retention of employment in the Federal Government and it is hard at times to reduce them.

Mr. FOLSOM. Ordinary attrition will take care of some of it. It will take time.

Mr. BARRY. I am glad you mentioned that. We always want to accomplish more in a short time than is possible. I am glad you caution us to be patient.

Mr. GROSS. I wish the gentleman would remain a minute.

Since the foreign giveaway program has been introduced in this discussion, it seems to be historic under its various sugar-coated names and titles-it seems to be historic over there that those who cause the most trouble get the promotions. I do not know how you are going to cure that in the hard core over there in the State Department and in this AID operation. The mission directors who louse up Laos, they are promoted to better jobs.

How do you cure that situation, Mr. Folsom, and the people who divulge the corrupt and dishonest practices in some of these countries are fired-the honest, capable, intelligent employee is fired?

Will this bill you propose here take care of that situation by giving them more money?

Mr. FOLSOM. We cannot cure all the ills in the Government by this proposal. My experience is based on Treasury and HEW. I was very much impressed with the caliber of the people we had and the system we had for promotion. I did find we would do a better job if we could pay better salaries for the people in the top management positions.

Mr. GROSS. I want to go back to the Eisenhower proposal. Do you recall in the Eisenhower proposal that it proposed the lid be taken off supergrades?

Mr. FOLSOM. Yes.

Mr. GROSS. It did?

Mr. FOLSOM. I think it proposed all the way up.

Mr. GROSS. Did the Eisenhower proposal provide increases in the top brackets of $5,000 to $10,000 a year?

Mr. FOLSOM. I remember the Cabinet Committee worked on it; we proposed it. I do not remember the final proposals. There were substantial increases in the top grades.

Mr. GROSS. Mr. Folsom, is it not a fact the Eisenhower proposal was for a study?

Mr. FOLSOM. No, not on an alternative. There was a definite recommendation for an increase in the top grades.

Mr. GROSS. Supposing then we settle this by you securing a copy of that and putting it in the record.

Mr. FOLSOM. Your next witness probably knows more about that. He worked on the later proposals. He was in the White House at the time. I think he can give you the details of it. As I recall, we recommended increases in the top grades.

Mr. GROSS. I do not question you recommended increases. What I am speaking of is the increases proposed in this bill, taking the establishment of supergrades 19 and 20 as this bill proposes and taking the ceiling off supergrades. I do not recall the Eisenhower administration making any such proposal in concrete form to this committee.

Mr. FOLSOM. I think we made recommendations for specific increases in certain of the top grades.

Mr. GROSS. This is important to me because you say that you supported the President's veto of the last pay increase bill on those grounds.

Mr. FOLSOM. Oh, no; on the ground it was a general increase, which is not what he recommended. That is why he vetoed it.

Mr. GROSS. I want to know specifically what the substitute was that the Eisenhower administration had in mind.

Mr. FOLSOM. I think the next witness can explain that in detail. Mr. DULSKI. Thank you very kindly. We appreciate your coming here.

The next witness is Mr. Gladieux, accompanied by Mr. Siciliano. STATEMENT OF BERNARD GLADIEUX, CHAIRMAN, EXECUTIVE COMMITTEE OF THE NATIONAL CIVIL SERVICE LEAGUE, ACCOMPANIED BY ROCCO SICILIANO, MEMBER OF THE BOARD OF THE NATIONAL CIVIL SERVICE LEAGUE

Mr. GLADIEUX. Mr. Chairman, my name is Bernard L. Gladieux. I am a vice president of Booz, Allen & Hamilton, management consultants. My office is in New York City.

I am here in my capacity as chairman of the board of directors of the National Civil Service League to support H.R. 10480, incorporating the President's recommendations with respect to Federal statutory salary systems.

The National Civil Service League, which Mr. Siciliano and I represent, is a nonprofit, nonpartisan citizen organization devoted to improving public management by the adoption of modern personnel policies in government. Instrumental in establishing the first civil service systems based on the merit principle in this country, the league for over 80 years has provided initiative and leadership designed to make public service a trust to the competent, loyal, and dedicated, and to enhance the dignity and prestige of government employment. The leadership of the league consists of a distinguished board of directors composed of business and professional leaders, many of whom have at one time served in high positions of responsibility in the Federal Government.

If you wish, I can submit a list of the members of the board of directors of the league so you will know whom Mr. Siciliano and I represent.

(The list referred to follows:)

President-Nicholas Kelley, Kelley, Drye, Newhall & Maginnes
Chairman, National Advisory Council-Robert L. Johnson

Chairman, Executive Committee-Bernard L. Gladieux, partner, Booz, Allen & Hamilton

Treasurer-Weston Rankin, partner, Price, Waterhouse & Co.
Executive Director-James R. Watson

Vice presidents:

Devereux C. Josephs, director, New York Life Insurance Co.
Murray Seasongood, Paxton & Seasongood

James A. Simpson, Lange, Simpson, Robinson & Somerville

Charles P. Taft, Headley and Taft

Board of directors:

Daniel W. Bell, chairman, American Security & Trust Co.

Bruce Bromley, Cravath, Swaine & Moore

John J. Corson, director, McKinsey & Co., Inc.

Walter D. Fuller, Walter D. Fuller Co.

William C. Greenough, president, Teachers Insurance & Annuity Association Louis A. Johnson, Steptoe & Johnson

Robert S. Kerr, Jr., Kerr, Conn & Davis

Joseph I. Lubin, Eisner & Lubin

James P. Mitchell, on leave

Samuel H. Ordway, Jr., vice president, Conservation Foundation.

Winston Paul, trustee

Don K. Price, dean, Graduate School of Public Administration, Harvard University

Harold S. Shefelman, Weter, Roberts & Shefelman

Rocco C. Siciliano, Wilkinson, Cragun & Barker

Sidney W. Souers, Chairman, General American Life Insurance Co.
Charles B. Stauffacher, executive vice president, Continental Can Co.
Mrs. Kathryn H. Stone, delegate, Virginia General Assembly
Edward F. Thomas, Edward Thomas Associates, Inc.

James E. Webb, on leave

Watson W. Wise, Wise Operating Companies

Mr. GLADIEUX. Beginning with the drafting of the Pendleton Act in 1883, the league has over the years participated in the consideration of improved public service legislation. We welcome this opportunity once again to express our views. The policy of the league on this particular legislation is best expressed in the following official letter of the league to the President, signed by Mr. Kelley and myself, dated April 18. This is a rather short letter, and I would like to read it into the record if you do not mind, since it represents the official position of the league on this matter.

Dear Mr. PRESIDENT: On behalf of the National Civil Service League, we commend the perceptive leadership embodied in your recent proposal to the Congress on "Reform of Federal Statutory Salary Systems." The board of directors of the league strongly endorses this proposal, as now incorporated in H.R. 10480. If enacted, the proposed plan would, in our judgment, represent the most striking advance in statutory provisions governing Federal pay since the enactment of the first Classification Act in 1923.

We recognize that 1962 is a crucial year regarding Federal salary policy. Pay reform, in accordance with your proposal, would (1) strengthen career incentives, (2) initiate the concept of Federal-private enterprise salary comparability as a continuing principle of Federal salary policy, and (3) make significant strides in the direction of a continuing program of executive initiative. We consider it imperative that the central purpose of your executive compensation proposal be approved this year in recognition of the appropriate role of executive leadership in personnel management. We also wish to go on record as expressing our conviction that the top compensation levels incorporated in your plan represent the minimum requisite to attracting and retaining administrative and professional talent of the capacity and stature required for preserving our position of world leadership. This means that the excessive leveling factors which in other years have served to compress the Federal salary structure must be avoided in any future legislation.

In view of the transcendent importance of the salary issue and its relation to total personnel policy, we urge the administration to continue vigorously and aggressively to bring the matter into clearer public and congressional understanding. We believe that each member of your administration should fully appreciate and reflect the President's concern on this issue. We hope that plans are maturing which will include personal appearances by the leaders of vital Federal programs so that the Congress will understand more clearly the critical importance of a sound and equitable pay plan to essential national programs. We understand that special treatment of distinct employee groups at various classification levels is being urged on the Congress at this time when general compensation is under consideration. In the perspective of a record extending over 80 years of supporting progressive efforts to improve the status of all levels of public service, the league declares unequivocally that the paramount need of our times in the Federal service is the strengthening of the top career ranks. This can best be achieved by adhering to the principle of comparability, thereby establishing a salary pattern more commensurate with relative weight of responsibility and assuring the compensation standards required to maintain effective leadership. We would deplore any legislation that merely perpetuates present inadequate differentials. All key career groups are included in your plan, and therefore separate actions for special groups would be inappropriate, inequitable and unnecessary.