Mr. STACK. Yes, I file a lobbyist statement here every 3 months and we file that form 990, with the Federal Government, and we have permission as an educational group to not pay income tax on our membership.

Mr. STAGGERS. Not to pay any income tax on your membership? Mr. STACK. Yes, under form 990, as we are chartered in the State as an educational group and as such we are entitled to that provision. Mr. STAGGERS. I would like to get it clear in my own mind, and this is only for my own information. I guess I can get it from other places but I thought I would ask you here: I am interested in this fact of your organization being an educational group.

Mr. STACK. Yes.

Mr. STAGGERS. Filed so with internal revenue, is that right?
Mr. STACK. That is right.

Mr. STAGGERS. I wanted to know that. I can get the information, but I just wanted to ask you how you did in this organization because I am interested in a democratic form for any group and I do believe the brotherhoods work that way and they elect their local leaders and their local leaders get together and elect State leaders and the State leaders elect their national leaders.

Mr. STACK. In our group, as far as shops and places like that are concerned, they pick their own delegate. Those are the 1,400 group leaders that I mentioned and told you about. Those are the fellows that speak for the men in those particular shops and offices. They relate that information to us which comes to our platform committee, and that is the basis on which our program is framed.

Mr. STAGGERS. You have a local election then, and local meetings, that get together and have an election?

Mr. STACK. That is right, for their particular delegate. That is for their particular delegate in that shop or office or whatever it is. Mr. STAGGERS. That is all, Mr. Chairman.

The CHAIRMAN. Is there anything further, gentlemen? If not, we thank you for your attendance, Mr. Stack.

The committee will adjourn at the call of the Chair. (Whereupon, the committee recessed at 12 noon.)

AMENDING RAILROAD RETIREMENT ACT, RAILROAD RETIREMENT TAX ACT, AND RAILROAD UNEMPLOYMENT INSURANCE ACT

FRIDAY, MARCH 12, 1954

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The committee met, pursuant to adjournment, at 10:30 a. m., in Room 1334, New House Office Building, Hon. Charles A. Wolverton (chairman) presiding.

The CHAIRMAN. The committee will be in order. We will continue with H. R. 7840, a bill to amend the Railroad Retirement Act, the Railroad Retirement Tax Act, and the Railroad Unemployment Insurance Act.

The members of the Railroad Retirement Board are present-Hon. Raymond J. Kelly, chairman, Mr. Horace W. Harper, and Mr. F. C. Squire, members.

Is it the desire of each of you to testify, or will testimony be given through some one member of the Board?

STATEMENT OF RAYMOND J. KELLY, CHAIRMAN, RAILROAD RETIREMENT BOARD, CHICAGO, ILL.

Mr. KELLY. Mr. Chairman, and gentlemen of the committee, I am Raymond J. Kelly, Chairman of the Railroad Retirement Board. Mr. BENNETT. Mr. Chairman, may I just interrupt for a moment? The CHAIRMAN. Certainly.

Mr. BENNETT. I would like to say to the committee that Mr. Kelly comes from my State (Michigan) and we in Michigan think very highly of him. He is a past commander of the American Legion, national commander; and veteran of both World War I and World War II. He is a prominent attorney and civic leader and we feel, Mr. Chairman, that he will do an outstanding job as Chairman of the Railroad Retirement Board.

The CHAIRMAN. We are very glad to have that information.

Mr. DOLLIVER. May I add, Mr. Chairman, that I have known Colonel Kelly for a great many years, and I would like to endorse what Mr. Bennett has said.

Mr. ROGERS. Mr. Chairman, before the gentleman gets started, may I say something?

The CHAIRMAN. Yes, Mr. Rogers.

Mr. ROGERS. I would like to state that the other day Mr. Stack used the expression about which there was some doubt as to where it came

from. That expression was: "To work I am not able, and to beg I am ashamed."

And, he quoted that as being from the Good Book. Now, there was some argument as to whether that was from the Good Book or whether Shakespeare said it. So, after some investigation-and, Mr. Stack did bring this to me, I will say that, and we find a similar expression in the Gospel of St. Luke, chapter XVI, verse 3, and reads thus:

Then the steward said within himself, What shall I do? for my Lord taketh away from me the stewardship: I cannot dig; to beg I am ashamed.

So, I thought that I would bring that up for the edification of the committee. Thank you very much, Mr. Chairman.

The CHAIRMAN. We are very glad to have that statement from our honored member from the State of Florida, to add to the knowledge that we do already have with reference to the Bible, and I trust that we will profit by it and accept the philosophy that is contained in those words.

Have we finished with the encomiums to Mr. Kelly? If so, let me say to you, Mr. Kelly and to the members of the Board, that our committee has been accustomed to having men of character, standing, and ability come from the State of Michigan. We have gotten to a point that when they are announced as coming from the State of Michigan, we rather expect that they will be just what has been said about you here this morning, Mr. Kelly.

Mr. KELLY. Thank you very much, Mr. Chairman.

The CHAIRMAN. Of course, we have had the opportunity of associating with our friend from Michigan who has served so ably upon this committee (Mr. Bennett), and we realize that there is no exception to that rule when an individual comes before us as a witness, whether he is a member of a board, or whether he is a member of Congress from the State of Michigan, he is respected and honored.

You may proceed.

Mr. KELLY. Thank you, Mr. Chairman.

I have been Chairman of the Railroad Retirement Board since my appointment last September. I took office on September 1, 1953. Now, my brief statement at this time will perhaps answer the chairman's question with reference to whether or not we each desire to apppear separately.

The Board has submitted to the committee statement that set forth the position of the majority of the Board with respect to H. R. 7840, as well as the view of the individual members on some of the provisions included therein. Mr. Horace W. Harper, member of the Board and myself are agreed on the main features of the bill. However, I personally feel the result sought by the bill can be accomplished by retaining the unemployment insurance benefit formula which we have used for 15 years.

I have explained my position in detail in my separate statement filed with this committee, along with the

Mr. THORNBERRY. Mr. Chairman.

The CHAIRMAN. Mr. Thornberry.

Mr. THORNBERRY. Will you pardon me? Would you mind telling us what you are reading from? Are you reading from the statement we have?

Mr. KELLY. No; this is just a brief preliminary statement.

Mr. THORNBERRY. I am sorry. Mr. KELLY. As a matter of fact, I am not following this exactly either; so, this is just something I have prepared.

I believe I stated that I explained my position in detail in my prepared statement which has been filed before with this committee along with the Board's majority report on the bill.

Mr. Harper, the railway labor member has filed his separate statement also advocating the change in the formula and other features of the bill.

Mr. Frank Squire, the carrier member of the Board objects to the bill in at least two main particulars and has filed his separate statement setting forth his position.

Now, these members of the Board are here with me this morning and will be available, all three of us, to answer any questions of the committee members throughout this hearing.

We also have with us members of the Board's staff, the technical staff, who are prepared to furnish you with any information at their disposal.

In the interest of saving time, I offer this report, together with the three statements attached to it, for the record, and I think unless it is suggested that I do so, why, we will refrain from reading my statement although it covers but 2 or 3 pages, on the retaining of the present formula, which we are following in the unemployment insurance phase.

The CHAIRMAN. Is it the desire of the committee that the statement shall be read? Or, do you wish to proceed with questions? Mr. PRIEST. Does the statement include in it the formula?

Mr. KELLY. Yes, sir, it does, Mr. Priest.

The CHAIRMAN. Are there any questions, gentlemen?

Mr. KELLY. That is on page 8, following the majority report.
Mr. PRIEST. Mr. Chairman.

The CHAIRMAN. Mr. Priest.

Mr. PRIEST. I do not think it will be necessary for Mr. Kelly to read his statement, but it might be helpful to the committee if he would briefly explain the substance of his statement; that is, why he believes that the formula previously used should be continued. I believe that in substance is your conclusion, is it not?

Mr. KELLY. That is correct. In coming to this conclusion, I called in the members of the technical staff and questioned them regarding the procedure. Our present formula, the one they have used, is quite a simple one; it is easy to follow. As a matter of fact, many of our claim examiners, I am told, actually adjudicate these claims from memory, because they have a picture of that chart. It is easy for them to do so.

I have set up in my brief statement how this can be accomplished by a few changes in the present chart. That would of course, have to be included in the act, as the other was, and I am prepared to offer this. I have but one copy here, but I am prepared to offer the suggested changes for section 304. This reads:

SEC. 304. Subsection (a) of section 2 of the Railroad Unemployment Insurance Act is hereby amended by striking out the table and by substituting therefor the following table

which is just a little different, but will be the same idea; the same principle, which we have followed. The figures only would be slightly different. It is not complicated. It is simple and will not cause any

great disruption in putting into effect this new bill, should it be adopted, whereas if the new formula is followed we are going to have to do a lot of training and a lot of work, at quite considerable expense, I think.

Mr. ROGERS. Mr. Chairman.

The CHAIRMAN. Mr. Rogers.

Mr. ROGERS. You make this statement:

While I do favor an increase in benefit rates, I am not in favor of the method proposed in H. R. 7840 for increasing them. It proposes to get these results the hard way by changing the whole benefit formula in the present law. Mr. KELLY. That is correct.

Mr. ROGERS. Would you give us a comparison as between the formula contained in this bill and the present formula, and why one is better than the other in your opinion?

Mr. KELLY. I set out on page 2 of my statement, I set up a comparison.

Mr. ROGERS. What page is that?

Mr. KELLY. Page 2 of my statement. That is about-you see, the first eight pages are the majority report on the bill. Then following that is my statement, which is composed of three pages, and then follows Mr. Harper's statement. Each of our statements starts with page 1. That may have been a mistake.

I am favor of increasing the benefits, and increasing the base so as to have the revenue to pay the benefits, but I think we could keep the present formula and still accomplish what is sought by this bill. Mr. ROGERS. Increasing the base to $350?

Mr. KELLY. $350; that is correct. And on page 2, you will find the answer to your question. I have a comparison of the present rates as they are set up in the act and the proposed rates, as it is proposed to amend them.

Mr. ROGERS. Well, under the formula you propose, which is, I believe, a proposal to continue the present formula, would that in any way affect the benefits, provided that the legislation is adopted, with the exception of the proposed new formula, would that affect the benefits, Mr. Kelly?

Mr. KELLY. No; not at all, if the new formula is adopted together with the act as prepared, just this simple new formula in place of the old, it would not affect the benefits.

In fact, of course, they will be increased.

Mr. ROGERS. They will be increased by the act.

Mr. KELLY. Yes, sir.

Mr. ROGERS. The formula itself would not increase them or decrease them?

Mr. KELLY. Well, if the benefits are increased, we would have to have a new formula, you see, and this is proposed to follow the same principle. The figures are the only difference.

Mr. ROGERS. Thank you.

Mr. THORNBERRY. Mr. Chairman.

The CHAIRMAN. Mr. Thornberry.

Mr. THORNBERRY. Mr. Kelly, I notice on the first page of your statement you say, "It would cost about $700,000 to administer the proposed amendment and it would be expensive for the railroads to provide us with the necessary information to administer it."

Do you mean by that that it would cost the Board or the railroad retirement fund $700,000 in addition to what it is costing now to administer the formula which is in the present act?