$3,000 you would be entitled to a monthly allowance of $15, based on that $3,000. Now, on the next $42,000 of gross earnings the benefit is calculated at the rate of one-twelfth of 1 percent. So that if you had earned $45,000 all together, you would get $15 a month for the first $3,000 and you would get $35 more for the next $42,000, making a total of $50 per month for gross earnings of $45,000.

Mr. FITZPATRICK. For the rest of your life?

Mr. ALTMEYER. For the rest of your life, beginning with age 65, or if you do not retire from regular work at that time, beginning when you do retire because the law does require retirement as a condition to receiving these benefits.

Mr. WOODRUM. You cannot receive any benefits under that provision if you are not employed?

Mr. ALTMEYER. You could not receive any monthly benefits. As I say, you can get a lump-sum benefit if you reach age 65 if it is before January 1, 1942, even though you did not retire.

Mr. WOODRUM. Even though you are still employed?

Mr. ALTMEYER. Yes, sir. You do not build up any more benefit rights and you are not taxed. We are going to recommend elimination of that provision so that a man who stays in employment after 65 will be taxed and will accumulate benefit rights because it is a considerable nuisance and hardship if you are to chop this man off at 65, figure out the small lump sum that he is entitled to, and bar him from building up a monthly benefit right if he stays in a year or two longer. Mr. FITZPATRICK. Suppose a man was 70 years of age when this law went into effect, he was still working, would he be entitled to benefit? Mr. ALTMEYER. No, sir.

Mr. FITZPATRICK. If he had passed 65 when the law went into effect he would not be entitled to any benefit?

Mr. ALTMEYER. No, sir; and his earnings would not be taxed.
Mr. HOUSTON. How much does a man pay?

Mr. ALTMEYER. He pays 1 percent for the first 3 years between now and 1940 and his employer pays an equal amount, 1 percent. making 2 percent. So that in effect a man is getting back 31% for 1 in the first 3 years. You see, you are paying 1 percent and you are getting 312 percent back.

Mr. HOUSTON. Assuming that a man became disabled when he was 40 or 45 years of age and he had been paying for 2 or 3 years, would he be entitled to anything under the Social Security Act?

Mr. WOODRUM. It is all based on unemployment. It is old-age unemployment compensation. You do not include anyone who is not a wage earner or has not been a wage earner?

Mr. ALTMEYER. It is really a form of unemployment due to old age.

Mr. FITZPATRICK. If a man was worth a million dollars, he could collect under this insurance?

Mr. ALTMEYER. Yes, sir. There is very considerable weight given to the first $3,000 of gross earnings, as I said. The benefit is figured at the rate of 1 percent on the first $3,000, at the rate of one-twelfth of 1 percent on the next $42,000, and then from there on at the rate of one twenty-fourth of 1 percent of all earnings over $45,000. So that a reasonable minimum monthly allowance is paid to the lower wage-earning groups.

But, because it is insurance and not based upon need, it is felt essential that regardless of whether a man is a millionaire or is a day laborer, he will draw his benefits as a matter of right.

Mr. FITZPATRICK. What is the largest amount a man could receive in a month under the law?

Mr. ALTMEYER. $85.

Mr. HOUSTON. In connection with this question Mr. Fitzpatrick asked you a moment ago where a man is 40 or 45 and becomes incapacitated, but he would not be paid until he reached the age of 65. He would have something coming, would he not?

Mr. ALTMEYER. Yes, sir.

Mr. HOUSTON. How about interest? They have had the money all this time.

Mr. ALTMEYER. There is no interest figured on that.

Mr. WOODRUM. It does not apply to people working for the Government?

Mr. ALTMEYER. No, sir. There is interest figured in this way, Mr. Houston, that the full amount of gross payments made into the reserve fund are drawing 3 percent, and the payments are based on the assumption they will earn 3 percent. But you do not figure interest on a specific item.

Mr. WOODRUM. It does not apply to people who are working for the Government?

Mr. ALTMEYER. No, sir.

Mr. WOODRUM. Is there any such thing as pyramiding of benefits under this and the old-age assistance section, can there be such a thing as a benefit coming from compensation insurance and also the old-age assistance provision?

Mr. ALTMEYER. Yes, sir. I think it will happen in the ordinary operation of this system, because the benefit payments may be smaller than necessary to maintain the person on the basis of need, in which case he would make application under the State old-age assistance law for a supplementary grant.

Mr. FITZPATRICK. And he would be paid the difference between what he gets and what he needs to exist?

Mr. ALTMEYER. Yes, sir.

Mr. DIRKSEN. You have a plan in mind for the purpose of ironing out the inequities that exist in the case of a man who is now say 40 or 50 years of age and who has not done a lick of work and yet, under the assistance law of a State like California, could qualify for $30 or $35 a month after he reached the age of 65?

Mr. ALTMEYER. Yes.

Mr. DIRKSEN. Now, he has not paid in a nickel. And, on the other hand, you have a man who has worked for years and who is 65 years of age and his accruals on a compensation basis will be only $20 or $25 a month and he has paid in for compensation insurance 5 or 6 or 8 or 10 years and he gets back $25 a month while this other man gets back $30 or $35 a month, and now you are coming along with an additional benefit in order to vitiate that inequity if there is a need so that a man in that situation could actually exist?

Mr. ALTMEYER. Yes; that can be done under the laws as they now stand.

Mr. DIRKSEN. That would be an answer to a question that has been raised as to whether or not annuities will ultimately make unnecessary old-age benefits?

Mr. ALTMEYER. Yes. That is the whole idea, as the system gets in fuller operation it will cut down this load of State old-age assist

ance.

Mr. DIRKSEN. A man was 65 years of age when the law went into effect and he worked 2 or 3 years and then a slack period came in his business and he was laid off-would he be entitled to a benefit? Mr. ALTMEYER. No.

Mr. DIRKSEN. An individual was 65 years of age when this law went into effect and he worked for 2 or 3 years and he was discharged-would he be entitled to any compensation?

Mr. ALTMEYER. He would not be entitled to any old-age monthly benefit, but he would be entitled to benefits under the State unemployment compensation act.

Mr. DIRKSEN. That is what I am talking about; he would be entitled to benefits under the State unemployment compensation act! Mr. ALTMEYER. Yes, sir.

Mr. DIRKSEN. Whether he needed it or not, he would be paid that benefit if he was over 65 years of age at the time the law went into effect?

Mr. ALTMEYER. Yes, sir.

SALARIES AND EXPENSES

(See p. 1153 et seq.)

PRESENT PERSONNEL AND NUMBER TO BE EMPLOYED BY JULY 1

Mr. WOODRUM. Now, Mr. Altmeyer, you were starting to tell us about your personnel, that you had so many on the rolls, in answer to Mr. Wigglesworth's question to divide them between departmental and field. How many will you employ between now and July 1, 1938?

Mr. ALTMEYER. We will add approximately 1,800 between now and July 1; as I said, a considerable number of the 1,800 being in connection with the Baltimore bookkeeping operations.

Mr. WIGGLESWORTH. I do not want all of the classifications, but how many of those will be departmental and how many in the field? Mr. ALTMEYER. I do not have that broken down.

Mr. WIGGLESWORTH. Will you put that in the record when you revise your remarks?

Mr. ALTMEYER. Yes, sir. I could give you an offhand guess. Do you mean of the ones

Mr. WIGGLESWORTH. Of the 1,800 that you are taking on.

Mr. ALTMEYER. Those will be, probably with the exception of 150, all either departmental here or over at Baltimore, most of them being at Baltimore.

Mr. WIGGLESWORTH. Sixteen hundred and fifty departmental and 150 in the field?

Mr. ALTMEYER. Yes. I will correct those figures for the record. (The information requested follows:)

Mr. WIGGLESWORTH. Let me see if I understand the present situation. You have 1,800 in Washington, and 2,600 at Baltimore, which makes 4,400 departmental?

Mr. ALTMEYER. Yes, sir.

Mr. WIGGLESWORTH. And then you have 2,330 in the field?
Mr. ALTMEYER. Yes.

Mr. WIGGLESWORTH. Is that all?

Mr. ALTMEYER. Yes, sir.

Mr. WIGGLESWORTH. Or an approximate total now of about 6,800? Mr. WOODRUM. At the present time.

Mr. ALTMEYER. Yes, sir; a total of 6,816 as of November 30,

1937.

Mr. WOODRUM. And, with the 1,800 by July 1, that is going to make a total of what?

Mr. CORSON. It is estimated that the personnel of the Board as of July 1, 1938, will include 8,617 individuals.

Mr. ALTMEYER. And, after that, we estimate that we are asking for a sufficient increase to employ 446 more.

Mr. WOODRUM. What type of persons will the 446 be?

Mr. ALTMEYER. Largely clerical, because 302 of the 466 are in the Bureau of Old Age Insurance. However, there will be some in the junior executive and executive classes.

Mr. WOODRUM. Are those all taken from the regular Civil Service register?

Mr. ALTMEYER. Yes, sir.

Mr. WOODRUM. In connection with civil-service rules and regula

tions?

Mr. ALTMEYER. Yes, sir. We are no longer permitted to employ experts as we previously did.

Mr. WOODRUM. I would like to ask you what has been the practical operation of the change made in the law at the last session, requiring the experts to have Senatorial confirmation. Has that worked out satisfactorily?

Mr. ALTMEYER. We have not employed anyone since that date as an expert or a lawyer at a salary exceeding $5,000 so we have not had occasion as yet to submit any additional names to the President and to the Senate for confirmation. All of the persons, lawyers, and experts, receiving $5,000 or more, whose names were submitted to the President and the Senate last year, were confirmed. Mr. WOODRUM. Without a single exception?

Mr. ALTMEYER. Without a single exception.

Mr. HOUSTON. How about this technical adviser? You are asking for one additional technical adviser there.

Mr. ALTMEYER. Yes, sir.

Mr. HOUSTON. Will he draw over $5,000 a year?

Mr. ALTMEYER. No.

Mr. HOUSTON. He will be under the civil service.

Mr. ALTMEYER. Yes; all of them; whether over $5,000 or not, now, because the Civil Service Commission takes the position that they have registers or can establish registers for all of our positions, so in effect we no longer have the right to employ experts outside of the civil service, except for temporary consulting jobs.

Mr. WIGGLESWORTH. How many have you on the rolls now that have not qualified under civil-service rules?

Mr. ALTMEYER. We have 201. Of that number, 18 are per diem consultants, who come in occasionally.

Mr. WIGGLESWORTH. What is the salary range of those?

Mr. ALTMEYER. There are 31 getting over $5,000 and the rest are getting under $5,000.

Mr. WIGGLESWORTH. Of the 466 additional, how are they divided between departmental and field?

Mr. ALTMEYER. I think that roughly it would be about 300 in the field and 166, departmental.

Mr. WIGGELESWORTH. That would bring the total up to 9,066 for the fiscal year 1939. Have you any estimate at all as to what the ultimate size of this administravtice set-up is going to be?

Mr. ALTMEYER. You are speaking of the Federal, not the State? Mr. WIGGLESWORTH. I am talking about the Federal Social Security Board organization.

CANVASSING OF EMPLOYERS AND EMPLOYEES AND RELATION TO EXPENSES

Mr. ALTMEYER. I would say that between now and July 1, 1942, when these monthly benefits start being paid, that we would not need to expand more than 1,000 beyond the contemplated expansion under this 1938 budget. The additional expansion would come gradually, in order to be ready to pay the great number of claims that will be made on July 1, 1942.

Mr. WOODRUM. You mean 600 in addition to the 400 that you are taking in 1939 ?

Mr. ALTMEYER. About one thousand in addition.

Mr. WOODRUM. You said the 1938 budget. You mean 1939.