centum of the next $100; and 1 per centum of the compensation in excess of $150. The "monthly compensation " shall be the average of the monthly compensation paid to the employee by the carrier, except that where applicable for service before the effective date the monthly compensation shall be the average of the monthly compensation for all pay-roll periods for which the employee shall have received compensation from any carrier out of eight consecutive calendar years of such services ending December 31, 1931. No part of any monthly compensation in excess of $300 shall be recognized in determining any annuity. No annuity shall be awarded in excess of $120 per month. Any employee who shall be entitled to an annuity with a commuted value determined by the Board of less than $300 shall be paid such value in a lump sum.

ANNUITIES TO REPRESENTATIVES

SEC. 4. The annuity of a representative shall be determined according to such rules and regulations as the Board shall deem just and reasonable and, as near as may be, shall be the same annuity as if the representative were still in the employ of his last former carrier.

PAYMENTS UPON DEATH

SEC. 5. If a person receiving or entitled to receive an annuity shall die, the Board, for one year after the 1st day of the month in which the death may have occurred, shall pay, as herein provided, an annuity equal to one-half of the annuity which such person so dying may have received or be entitled to receive, to the widow or widower of the deceased, or if there be no widow or widower, to such beneficiary as the deceased employee may have designated, or in the absence of such designation, to the dependent next of kin of the deceased.

RETIREMENT BOARD

PERSONNEL

SEC. 6. (a) There is hereby established as an independent agency in the executive branch of the Government a Railroad Retirement Board, to be composed of three members appointed by the President, by and with the advice and consent of the Senate. Each member shall hold office for a term of five years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed, shall be appointed for the remainder of the term and the terms of office of the members first taking office after the date of enactment of this Act shall expire, as designated by the President, one at the end of two years, one at the end of three years, and one at the end of four years, after the date of enactment of this Act. One member shall be appointed from recommendations made by representatives of the employees and one member shall be appointed from recommendations made by representatives of the carriers, in both cases as the President shall direct, so as to provide representation on the Board satisfactory to the largest number, respectively, of employees and carriers concerned. One member, who shall be the chairman of the Board, shall be appointed initially, for a term of two years without recommendation by either carriers or employees and shall not be in the employment of or be pecuniarily or otherwise interested in any carrier or organization of employees. Vacancies in the Board shall not impair the powers nor affect the duties of the Board nor of the remaining members of the Board of whom a majority of those in office shall constitute a quorum for the transaction of business. Each of said members shall receive a salary of $10,000 per year, together with necessary traveling expenses and subsistence expenses, or per diem allowance in lieu thereof, while away from the principal office of the Board on duties required by this Act.

The Board shall maintain such offices, provide such equipment, furnishings, supplies, services, and facilities and employ such persons as may be necessary for the proper discharge of its duties and fix the compensation of any persons so employed.

DUTIES

(b) The Board shall have and exercise all the duties and powers necessary to administer this Act. The Board shall take such steps as may be necessary to enforce this Act and make and certify awards and payments.

The Board shall establish and promulgate rules and regulations and provide for the adjustment of all controversial matters, with power as a Board or through any member or subordinate designated therefor, to require and compel the attendance of witnesses, administer oaths, take testimony, and make all necessary investigations in any matter involving annuities or other payments, and shall maintain such offices, provide such equipment, furnishings, supplies, services, and facilities and employ such persons and provide for their compensation and expenses, as may be necessary to the proper discharge of its functions. All rules, regulations, or decisions of the Board shall require the approval of at least two members and shall be entered upon the records of the Board which shall be a public record. The Board shall gather, keep, compile, and publish in convenient form such records and data as may be necessary, and at intervals of not more than two years shall cause to be made actuarial surveys and analyses, to determine from time to time the payments to be required to provide for all annuities, other disbursements and expenses, and to assure proper administration and the adequacy and permanency of the retirement system hereby established. The Board shall have power to require all carriers and employees and any officer, board, commission, or other agency of the United States to furnish such information and records as shall be necessary for the administration of this Act. The Board shall make an annual report to the President of the United States to be submitted to Congress. Witnesses summoned before the Board shall be paid the same fees and mileage that are paid witnesses in the courts of the United States.

SPECIAL REPORT

SEC. 7. Not less than four years from the effective date of this Act the Board, in a special report to the President of the United States to be submitted to Congress, shall make specific recommendations for such changes in the retire ment system hereby created as shall assure the adequacy of said retirement system on the basis of its experience and all information and experience then available. For this purpose the Board shall, from time to time, make such investigations and actuarial studies as shall provide the fullest information practicable for such report and recommendations.

COURT JURISDICTION

SEC. 8. The several District Courts of the United States and the Supreme Court of the District of Columbia, respectively, shall have jurisdiction to entertain an application and to grant appropriate relief in the following cases which may arise under the provisions of this Act: ·

(a) An application by an employee in or to the district court of any district wherein the Board may have established an office, to compel the Board to set aside an action or decision claimed to be in violation of a legally enforceable right of the applicant, or to take action, or to make a decision necessary for the enforcement of a legal right of the applicant.

(b) The jurisdiction herein specifically conferred upon the said Federal courts shall not be held exclusive of any jurisdiction otherwise possessed by said courts to entertain actions at law or suits in equity in aid of the enforcement of rights or obligations arising under the provisions of this Act.

(c) The Railroad Retirement Board, as hereinbefore established, shall be and constitute a body corporate and be capable of suing and being sued as such.

EXEMPTION

SEC. 9. No annuity payment shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated.

PENALTIES

SEO. 10. Any officer or agent of a carrier, as the word "carrier" is hereinbefore defined, or any employee as such word is hereinbefore defined, or any

person whether or not of the character hereinbefore defined, who shall willfully fail or refuse to make any report or furnish any information required by the Board in the administration of this Act, or who shall knowingly make any false or fraudulent statement or report in response to any report or statement required to be made for the purpose of this Act, or who shall knowingly make or aid in making any false or fraudulent statement or claim for the purpose of receiving any award or payment under this Act, or who shall fail or refuse to retire from service as hereinbefore required, shall be punished by a fine of not less than $100 nor more than $10,000 or by imprisonment not exceeding one year.

SEPARABILITY

SEC. 11. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act or application of such provision to other persons or circumstances shall not be affected thereby.

APPROPRIATION AUTHORIZED

SEC. 12. The appropriation of the sum of $50,000,000, out of any money in the Treasury of the United States not otherwise appropriated, for the purpose of carrying this Act into effect for the fiscal year beginning July 1, 1935, is hereby authorized.

Senator BROWN. Senator Wagner wished to have it reported that he is absent today by reason of the fact that he is busy in connection with hearings of the Committee on Public Lands, of which committee he is chairman.

Can we now get a general idea of about how many witnesses are going to appear at this hearing?

Mr. SHEA. Speaking for the railroad employees, Mr. Chairman, up to this time we will have at least two that is, myself and Mr. Krauthoff, an attorney, who will represent the railroad employees in a general presentation.

Of

Mr. KRAUTHOFF. Mr. Shea has referred to me as a witness. course, that is in a sense in a figurative way. Our thought was that I would introduce before this committee the hearings that had taken place heretofore, the record in the case that was decided by the Supreme Court, and the brief that was filed on behalf of the Retirement Board in the Supreme Court, and let that be our evidence before this committee from the standpoint of evidence.

Senator BROWN. Was it your intention to take up the present bill and have any remarks to make concerning the items of that bill? Mr. KRAUTHOFF. We expected to explain the operation of the present bill; but I was going to ask whether the committee would permit us to follow that course and introduce these documents.

Senator BROWN. Yes. I think it is proper that the records of the other hearings should be incorporated, as well as the decision of the Court, and be made a part of the record in this hearing and be so considered.

Mr. KRAUTHOFF. We have no evidence, in the legal sense of the word, that we desire to offer at all.

Senator BROWN. Can you give a general idea as to the amount of time the proponents of the bill, you and Mr. Shea, will take up on your presentation?

Mr. KRAUTHOFF. We do not think we would exceed 30 minutes.
Senator BROWN. As a total?

Mr. KRAUTHOFF. That is the total.
Senator BROWN. Now, Mr. Fletcher?

Mr. FLETCHER. The Railroad Association will have two witnesses, Mr. Chairman, Dr. Parmelee, director of the Bureau of Railway Economics, and myself. I imagine that it will take us about an hour and a half, perhaps, to present our views.

Senator BROWN. As I understand it, Mr. Fletcher, you and those whom you represent do not care to go ahead today?

Mr. FLETCHER. I would prefer not to, Mr. Chairman. I was going to say that I had stated to the clerk of the committee on yesterday that I would like to have an arrangement, if possible, that you do not have hearings tomorrow. That is purely personal, and I cannot urge that too far. It is for the reason that I am almost obliged to be away tomorrow by reason of a long-standing engagement that it is impossible to postpone. Beyond that, I have no request or suggestion to make.

Senator BROWN. I will say this, that unless something unforeseen occurs it will not be possible for the subcommittee to go ahead any other day this week, and we will probably take up the hearings some time next week, after today. So your plans for the remainder of the week will not be disarranged in any way if you are not able to be here.

Now, who else wants to be heard?

Mr. EKERN. I would like to appear on behalf of the Railroad Employees National Pension Association, which appeared here before, and probably I will have only one other witness. I do not think it will take very long.

Senator BROWN. Do you want to be heard today as a proponent or opponent of the bill?

Mr. EKERN. As a proponent. We have some suggestions in regard to the form of the legislation, and some possible amendments to the bill. I understand some will be offered by the Brotherhood representatives.

Mr. CASS. Mr. Chairman, representing the interurban electric railways engaged in interstate commerce, we would like to have about 15 or 20 minutes to put in our viewpoints on the bill, in opposition to the bill. We are prepared to go ahead today.

Senator BROWN. În opposition, you say?

Mr. CASS. Yes, sir.

Mr. MILLER. I represent the American Short Line Railroad Association, and we would like to have 45 minutes to present our views in opposition to the bill.

Senator BROWN. No one seems to want to take a lot of time today. Why could we not plan to get in all the evidence today, unless we run into something that cannot be foreseen, except possibly what may appear from Mr. Fletcher's side? It seems to me that none of you anticipate taking up a whole lot of time, and perhaps we could dispose of that phase of it today, providing Mr. Krauthoff and Mr. Shea do not take up more than half an hour.

Mr. MILLER. May I say that my testimony cannot very well be put into the record until after Judge Fletcher and Dr. Parmelee put theirs in, because it would make a disconnected story.

Mr. CASS. I can go ahead, Mr. Chairman.

Mr. EKERN. May we have some idea as to what time this hearing could be resumed next week, Mr. Chairman ?

Senator BROWN. I cannot tell you at this time. I will let you know just as soon as possible. I do not anticipate any long delay. But other things have come up, and I might not be able to be here for one. There will not be any long delay.

Now, Mr. Shea, you may proceed.

STATEMENT OF TIMOTHY SHEA, ASSISTANT PRESIDENT BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, REPRESENTING THE RAILWAY LABOR EXECUTIVES' ASSOCIATION, WASHINGTON, D. C.

Mr. SHEA. Mr. Chairman, in all my experience as a representative of railroad workers I never was associated with a case where the railroad men as a whole were so intensely concerned as they are in the case now before your committee.

President Roosevelt on June 27, 1934, approved the Railroad Retirement Act which had been passed by the Senate and House of Representatives, in each case without a record vote.

In view of this action on the part of the Congress and the President, we shall assume that when Congress passed the act of 1934 and the President approved it the need of a retirement system for railway employees

Senator BROWN. What do you mean by saying it was without a record vote?

Mr. SHEA. It was not a roll call.

Senator BROWN. They had a roll call in the Senate.

Mr. SHEA. I will stand corrected on that, then.

The need of a retirement for railway employees had been shown to the satisfaction of both the President and the Congress. Nothing has occurred since that date to change the situation. On the other hand, the need for a retirement system is, if anything, greater than it was in 1934.

A suit was brought in the Supreme Court of the District of Columbia by 134 carriers who were subject to the operation of the act, in which the carriers claimed that the Retirement Act was unconstitutional. That suit reached the Supreme Court of the United States, where by a decision of a majority of five judges (four judges dissenting) the Retirement Act of 1934 was held void. I am not a lawyer and so shall not undertake to explain to a committee composed of lawyers just how the Supreme Court reached that conclusion. The members of the subcommittee have doubtless read the opinion of the Supreme Court and the dissenting opinion in the same In any event, both opinions will be made a part of the hearing before this subcommittee, and our counsel, Mr. Krauthoff, will analyze the decision in detail.

case.

The Railway Labor Executives' Association is composed of 21 standard railway labor organizations, including in their scope every phase of labor performed in and about the operation of a railroad. These organizations represent approximately a million workers.

These 21 organizations acting together set up a legislative committee. This committee, with the approval of the executives of the several organizations I have mentioned, submits as a retirement bill S. 3151. This bill has the unanimous endorsement of the members